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An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act and to amend other Acts in consequence

S.C. 2001, c. 14

Assented to 2001-06-14

An Act to amend the Canada Business Corporations Act and the Canada Cooperatives Act and to amend other Acts in consequence

SUMMARY

This enactment amends the Canada Business Corporations Act. It is the first major revision of the Act since it came into force in 1975.

Among other things, the enactment amends the provisions concerning liability of directors. It allows for a defence based on due diligence and amends the indemnification provisions allowing for the advancement of defence costs, and allowing indemnification in relation to investigations. It also implements a new regime regarding the apportionment of damage awards applicable to persons involved in the preparation of financial information required under the Act or the regulations, including directors and officers.

The residency requirements for directors and the requirements specifying the location of corporate records have been relaxed. Residency requirements for committees of directors have been eliminated.

The enactment also includes measures to facilitate communications among shareholders and between corporations and their shareholders. To this end, it permits a greater utilization of electronic communications, including holding meetings and voting by electronic means. The enactment also relaxes the rules for proxy solicitation and for certain aspects of the requirements for the submission of proposals and sets conditions for the latter.

The enactment also amends the provisions relating to the civil remedies available in situations of insider trading and eliminates insider reporting.

A series of amendments are included that remove the requirements relating to financial assistance and take-over bids. The enactment expressly authorizes, under certain conditions, going-private and squeeze-out transactions. It also addresses the rights, powers, duties and liabilities of directors and shareholders under a unanimous shareholder agreement and defences available to them.

The enactment provides a number of limited exceptions to the general rule prohibiting subsidiaries from acquiring shares of the parent corporation.

The enactment also includes technical amendments to the Act to clarify certain provisions, to correct errors, to modernize it and to render the language in the English version gender neutral.

It also amends the Canada Cooperatives Act in order to generally harmonize its provisions with the amendments mentioned above, repeals the definition of “associate” in certain Acts and makes consequential amendments to other Acts.

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

R.S., c. C-44; 1994, c. 24, s. 1(F) CANADA BUSINESS CORPORATIONS ACT

1. (1) The definitions “auditor”, “person” and “unanimous shareholder agreement” in subsection 2(1) of the Canada Business Corporations Act are replaced by the following:

“auditor”

« vérificateur »

“auditor” includes a partnership of auditors or an auditor that is incorporated;

“unanimous shareholder agreement” means an agreement described in subsection 146(1) or a declaration of a shareholder described in subsection 146(2).

(2) The definition “mandataire” in subsection 2(1) of the French version of the Act is replaced by the following:

« mandataire »

Marginal note:French version only

mandataire S’entend notamment de l’ayant cause.

(3) Paragraph (c) of the definition “associate” in subsection 2(1) of the Act is replaced by the following:

(c) a trust or estate in which that person has a substantial beneficial interest or in respect of which that person serves as a trustee or liquidator of the succession or in a similar capacity,

(4) The portion of the definition “associate” in subsection 2(1) of the English version of the Act before paragraph (a) is replaced by the following:

“associate”

« liens »

“associate”, in respect of a relationship with a person, means

(5) Subsection 2(1) of the Act is amended by adding the following in alphabetical order:

“distributing corporation”

« société ayant fait appel au public »

“distributing corporation” means, subject to subsections (6) and (7), a distributing corporation as defined in the regulations;

“entity”

« entité »

“entity” means a body corporate, a partnership, a trust, a joint venture or an unincorporated association or organization;

“going-private transaction”

« opération de fermeture »

“going-private transaction” means a going-private transaction as defined in the regulations;

“officer”

« dirigeant »

“officer” means an individual appointed as an officer under section 121, the chairperson of the board of directors, the president, a vice-president, the secretary, the treasurer, the comptroller, the general counsel, the general manager, a managing director, of a corporation, or any other individual who performs functions for a corporation similar to those normally performed by an individual occupying any of those offices;

“personal representative”

« représentant personnel »

“personal representative” means a person who stands in place of and represents another person including, but not limited to, a trustee, an executor, an administrator, a receiver, an agent, a liquidator of a succession, a guardian, a tutor, a curator, a mandatary or an attorney;

“squeeze-out transaction”

« opération d’éviction »

“squeeze-out transaction” means a transaction by a corporation that is not a distributing corporation that would require an amendment to its articles and would, directly or indirectly, result in the interest of a holder of shares of a class of the corporation being terminated without the consent of the holder, and without substituting an interest of equivalent value in shares issued by the corporation, which shares have equal or greater rights and privileges than the shares of the affected class;

(6) Subsection 2(4) of the French version of the Act is replaced by the following:

(6) On the application of a corporation, the Director may determine that the corporation is not or was not a distributing corporation if the Director is satisfied that the determination would not be prejudicial to the public interest.

Marginal note:Exemptions — classes of corporations

(7) The Director may determine that a class of corporations are not or were not distributing corporations if the Director is satisfied that the determination would not be prejudicial to the public interest.

Marginal note:Infants

(8) For the purposes of this Act, the word “infant” has the same meaning as in the applicable provincial law and, in the absence of any such law, has the same meaning as the word “child” in the United Nations Convention on the Rights of the Child, adopted in the United Nations General Assembly on November 20, 1989.

Marginal note:1996, c. 10, s. 212; 1999, c. 31, s. 63

2. Subsection 3(3) of the French version of the Act is replaced by the following:

3. (1) The portion of subsection 6(1) of the Act before paragraph (a) is replaced by the following:

Marginal note:Articles of incorporation

6. (1) Articles of incorporation shall follow the form that the Director fixes and shall set out, in respect of the proposed corporation,

(2) Paragraph 6(1)(b) of the Act is replaced by the following:

(b) the province in Canada where the registered office is to be situated;

4. Section 8 of the Act is replaced by the following:

Marginal note:Certificate of incorporation

8. (1) Subject to subsection (2), on receipt of articles of incorporation, the Director shall issue a certificate of incorporation in accordance with section 262.

Marginal note:Exception — failure to comply with Act

(2) The Director may refuse to issue the certificate if a notice that is required to be sent under subsection 19(2) or 106(1) indicates that the corporation, if it came into existence, would not be in compliance with this Act.

5. Subsection 10(3) of the Act is replaced by the following:

Marginal note:Alternate name

(3) Subject to subsection 12(1), the name of a corporation may be set out in its articles in an English form, a French form, an English form and a French form, or a combined English and French form, so long as the combined form meets the prescribed criteria. The corporation may use and may be legally designated by any such form.

6. Subsection 13(1) of the Act is replaced by the following:

Marginal note:Certificate of amendment

13. (1) When a corporation has had its name revoked and a name assigned to it under subsection 12(5), the Director shall issue a certificate of amendment showing the new name of the corporation and shall give notice of the change of name as soon as practicable in a publication generally available to the public.

7. (1) Subsection 14(1) of the Act is replaced by the following:

Marginal note:Personal liability

14. (1) Subject to this section, a person who enters into, or purports to enter into, a written contract in the name of or on behalf of a corporation before it comes into existence is personally bound by the contract and is entitled to its benefits.

(2) Subsection 14(3) of the Act is replaced by the following:

Marginal note:Application to court

(3) Subject to subsection (4), whether or not a written contract made before the coming into existence of a corporation is adopted by the corporation, a party to the contract may apply to a court for an order respecting the nature and extent of the obligations and liability under the contract of the corporation and the person who entered into, or purported to enter into, the contract in the name of or on behalf of the corporation. On the application, the court may make any order it thinks fit.

8. Section 18 of the Act is replaced by the following:

Marginal note:Authority of directors, officers and agents

18. (1) No corporation and no guarantor of an obligation of a corporation may assert against a person dealing with the corporation or against a person who acquired rights from the corporation that

(a) the articles, by-laws and any unanimous shareholder agreement have not been complied with;

(b) the persons named in the most recent notice sent to the Director under section 106 or 113 are not the directors of the corporation;

(c) the place named in the most recent notice sent to the Director under section 19 is not the registered office of the corporation;

(d) a person held out by a corporation as a director, an officer or an agent of the corporation has not been duly appointed or has no authority to exercise the powers and perform the duties that are customary in the business of the corporation or usual for a director, officer or agent;

(e) a document issued by any director, officer or agent of a corporation with actual or usual authority to issue the document is not valid or not genuine; or

(f) a sale, lease or exchange of property referred to in subsection 189(3) was not authorized.

Marginal note:Exception

(2) Subsection (1) does not apply in respect of a person who has, or ought to have, knowledge of a situation described in that subsection by virtue of their relationship to the corporation.

9. Section 19 of the Act is replaced by the following:

Marginal note:Registered office

19. (1) A corporation shall at all times have a registered office in the province in Canada specified in its articles.

Marginal note:Notice of registered office

(2) A notice of registered office in the form that the Director fixes shall be sent to the Director together with any articles that designate or change the province where the registered office of the corporation is located.

Marginal note:Change of address

(3) The directors of a corporation may change the place and address of the registered office within the province specified in the articles.

Marginal note:Notice of change of address

(4) A corporation shall send to the Director, within fifteen days of any change of address of its registered office, a notice in the form that the Director fixes and the Director shall file it.

10. Subsection 20(5) of the Act is replaced by the following:

Marginal note:Records in Canada

(5) If accounting records of a corporation are kept outside Canada, accounting records adequate to enable the directors to ascertain the financial position of the corporation with reasonable accuracy on a quarterly basis shall be kept at the registered office or any other place in Canada designated by the directors.

Marginal note:When records or registers kept outside Canada

(5.1) Despite subsections (1) and (5), but subject to the Income Tax Act, the Excise Tax Act, the Customs Act and any other Act administered by the Minister of National Revenue, a corporation may keep all or any of its corporate records and accounting records referred to in subsection (1) or (2) at a place outside Canada, if

(a) the records are available for inspection, by means of a computer terminal or other technology, during regular office hours at the registered office or any other place in Canada designated by the directors; and

(b) the corporation provides the technical assistance to facilitate an inspection referred to in paragraph (a).

11. (1) Subsection 21(1) of the Act is replaced by the following:

Marginal note:Access to corporate records

21. (1) Subject to subsection (1.1), shareholders and creditors of a corporation, their personal representatives and the Director may examine the records described in subsection 20(1) during the usual business hours of the corporation, and may take extracts from the records, free of charge, and, if the corporation is a distributing corporation, any other person may do so on payment of a reasonable fee.

Marginal note:Requirement for affidavit — securities register

(1.1) Any person described in subsection (1) who wishes to examine the securities register of a distributing corporation must first make a request to the corporation or its agent, accompanied by an affidavit referred to in subsection (7). On receipt of the affidavit, the corporation or its agent shall allow the applicant access to the securities register during the corporation’s usual business hours, and, on payment of a reasonable fee, provide the applicant with an extract from the securities register.

(2) Subsection 21(3) of the Act is replaced by the following:

Marginal note:Shareholder lists

(3) Shareholders and creditors of a corporation, their personal representatives, the Director and, if the corporation is a distributing corporation, any other person, on payment of a reasonable fee and on sending to a corporation or its agent the affidavit referred to in subsection (7), may on application require the corporation or its agent to furnish within ten days after the receipt of the affidavit a list (in this section referred to as the “basic list”) made up to a date not more than ten days before the date of receipt of the affidavit setting out the names of the shareholders of the corporation, the number of shares owned by each shareholder and the address of each shareholder as shown on the records of the corporation.

(3) Subsection 21(7) of the Act is replaced by the following:

Marginal note:Contents of affidavit

(7) The affidavit required under subsection (1.1) or (3) shall state

(a) the name and address of the applicant;

(b) the name and address for service of the body corporate, if the applicant is a body corporate; and

(c) that the basic list and any supplemental lists obtained pursuant to subsection (4) or the information contained in the securities register obtained pursuant to subsection (1.1), as the case may be, will not be used except as permitted under subsection (9).

(4) Subsection 21(8) of the French version of the Act is replaced by the following:

(9) A list of shareholders or information from a securities register obtained under this section shall not be used by any person except in connection with

(a) an effort to influence the voting of shareholders of the corporation;

(b) an offer to acquire securities of the corporation; or

(c) any other matter relating to the affairs of the corporation.

12. Section 23 of the Act is replaced by the following:

Marginal note:Corporate seal

23. (1) A corporation may, but need not, adopt a corporate seal, and may change a corporate seal that is adopted.

Marginal note:Validity of unsealed documents

(2) A document executed on behalf of a corporation is not invalid merely because a corporate seal is not affixed to it.

13. Subsection 25(5) of the Act is replaced by the following:

Definition of “property”

(5) For the purposes of this section, “property” does not include a promissory note, or a promise to pay, that is made by a person to whom a share is issued, or a person who does not deal at arm’s length, within the meaning of that expression in the Income Tax Act, with a person to whom a share is issued.

14. (1) Subsection 26(3) of the Act is replaced by the following:

Marginal note:Exception for non-arm’s length transactions

(3) Despite subsection (2), a corporation may, subject to subsection (4), add to the stated capital accounts maintained for the shares of classes or series the whole or any part of the amount of the consideration that it receives in an exchange if the corporation issues shares

(a) in exchange for

(i) property of a person who immediately before the exchange did not deal with the corporation at arm’s length within the meaning of that expression in the Income Tax Act,

(ii) shares of, or another interest in, a body corporate that immediately before the exchange, or that because of the exchange, did not deal with the corporation at arm’s length within the meaning of that expression in the Income Tax Act, or

(iii) property of a person who, immediately before the exchange, dealt with the corporation at arm’s length within the meaning of that expression in the Income Tax Act, if the person, the corporation and all the holders of shares in the class or series of shares so issued consent to the exchange; or

(b) pursuant to an agreement referred to in subsection 182(1) or an arrangement referred to in paragraph 192(1)(b) or (c) or to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated body corporate.

(2) Subsection 26(9) of the Act is replaced by the following:

Marginal note:Transitional

(9) For the purposes of subsection 34(2), sections 38 and 42, and paragraph 185(2)(a), when a body corporate is continued under this Act its stated capital is deemed to include the amount that would have been included in stated capital if the body corporate had been incorporated under this Act.

(3) Subsection 26(12) of the Act is replaced by the following:

Definition of “open-end mutual fund”

(12) For the purposes of this section, “open-end mutual fund” means a distributing corporation that carries on only the business of investing the consideration it receives for the shares it issues, and all or substantially all of those shares are redeemable on the demand of a shareholder.

15. (1) Subsection 27(1) of the Act is replaced by the following:

Marginal note:Shares in series

27. (1) The articles may authorize, subject to any limitations set out in them, the issue of any class of shares in one or more series and may do either or both of the following:

(a) fix the number of shares in, and determine the designation, rights, privileges, restrictions and conditions attaching to the shares of, each series; or

(b) authorize the directors to fix the number of shares in, and determine the designation, rights, privileges, restrictions and conditions attaching to the shares of, each series.

(2) Subsection 27(4) of the Act is replaced by the following:

Marginal note:Amendment of articles

(4) If the directors exercise their authority under paragraph (1)(b), they shall, before the issue of shares of the series, send, in the form that the Director fixes, articles of amendment to the Director to designate a series of shares.

16. The portion of subsection 29(1) of the French version of the Act before paragraph (a) is replaced by the following:

(2) The portion of subsection 30(2) of the Act before paragraph (a) is replaced by the following:

Marginal note:Subsidiary holding shares of its parent

(2) Subject to section 31, a corporation shall cause a subsidiary body corporate of the corporation that holds shares of the corporation to sell or otherwise dispose of those shares within five years from the date

18. (1) Section 31 of the French version of the Act is replaced by the following:

(2) Section 31 of the Act is amended by adding the following after subsection (2):

Marginal note:Exception — subsidiary acquiring shares

(3) A corporation may permit any of its subsidiary bodies corporate to acquire shares of the corporation

(a) in the subsidiary’s capacity as a legal representative, unless the subsidiary would have a beneficial interest in the shares; or

(b) by way of security for the purposes of a transaction entered into by the subsidiary in the ordinary course of a business that includes the lending of money.

Marginal note:Exception — conditions precedent

(4) A corporation may permit any of its subsidiary bodies corporate to acquire shares of the corporation through the issuance of those shares by the corporation to the subsidiary body corporate if, before the acquisition takes place, the conditions prescribed for the purposes of this subsection are met.

Marginal note:Conditions subsequent

(5) After an acquisition has taken place under the purported authority of subsection (4), the conditions prescribed for the purposes of this subsection must be met.

Marginal note:Non-compliance with conditions

(6) If

(a) a corporation permits a subsidiary body corporate to acquire shares of the corporation under the purported authority of subsection (4), and

(b) either

(i) one or more of the conditions prescribed for the purposes of subsection (4) were not met, or

(ii) one or more of the conditions prescribed for the purposes of subsection (5) are not met or cease to be met,

then, notwithstanding subsections 16(3) and 26(2), the prescribed consequences apply in respect of the acquisition of the shares and their issuance.

19. Section 33 of the Act is replaced by the following:

Marginal note:Voting shares

33. (1) A corporation holding shares in itself or in its holding body corporate shall not vote or permit those shares to be voted unless the corporation

(a) holds the shares in the capacity of a legal representative; and

(b) has complied with section 153.

Marginal note:Subsidiary body corporate

(2) A corporation shall not permit any of its subsidiary bodies corporate holding shares in the corporation to vote, or permit those shares to be voted, unless the subsidiary body corporate satisfies the requirements of subsection (1).

20. The portion of subsection 34(2) of the French version of the Act before paragraph (a) is replaced by the following:

(2) Subparagraph 35(3)(b)(ii) of the Act is replaced by the following:

(ii) the amount required for payment on a redemption or in a liquidation of all shares the holders of which have the right to be paid before the holders of the shares to be purchased or acquired, to the extent that the amount has not been included in its liabilities.

22. (1) Subsection 36(1) of the French version of the Act is replaced by the following:

(3) Subparagraph 36(2)(b)(ii) of the Act is replaced by the following:

(ii) the amount that would be required to pay the holders of shares that have a right to be paid, on a redemption or in a liquidation, rateably with or before the holders of the shares to be purchased or redeemed, to the extent that the amount has not been included in its liabilities.

23. Subsection 38(6) of the Act is repealed.

24. Subsection 39(12) of the French version of the Act is replaced by the following:

40. (1) A corporation shall fulfil its obligations under a contract to buy shares of the corporation, except if the corporation can prove that enforcement of the contract would put it in breach of any of sections 34 to 36.

Marginal note:Status of contracting party

(2) Until the corporation has fulfilled all its obligations under a contract referred to in subsection (1), the other party retains the status of claimant entitled to be paid as soon as the corporation is lawfully able to do so or, in a liquidation, to be ranked subordinate to the rights of creditors and to the rights of holders of any class of shares whose rights were in priority to the rights given to the holders of the class of shares being purchased, but in priority to the rights of other shareholders.

Marginal note:1994, c. 24, s. 10

26. Section 44 of the Act is repealed.

27. Subsections 45(1) and (2) of the Act are replaced by the following:

Marginal note:Shareholder immunity

45. (1) The shareholders of a corporation are not, as shareholders, liable for any liability, act or default of the corporation except under subsection 38(4), 118(4) or (5), 146(5) or 226(4) or (5).

Marginal note:Lien on shares

(2) Subject to subsection 49(8), the articles may provide that the corporation has a lien on a share registered in the name of a shareholder or the shareholder’s personal representative for a debt of that shareholder to the corporation, including an amount unpaid in respect of a share issued by a body corporate on the date it was continued under this Act.

Marginal note:1991, c. 47, s. 720

28. (1) Subsection 46(1) of the Act is replaced by the following:

Marginal note:Sale of constrained shares by corporation

46. (1) A corporation that has constraints on the issue, transfer or ownership of its shares of any class or series may, for any of the purposes referred to in paragraphs (a) to (c), sell, under the conditions and after giving the notice that may be prescribed, as if it were the owner of the shares, any of those constrained shares that are owned, or that the directors determine in the manner that may be prescribed may be owned, contrary to the constraints in order to

(a) assist the corporation or any of its affiliates or associates to qualify under any prescribed law of Canada or a province to receive licences, permits, grants, payments or other benefits by reason of attaining or maintaining a specified level of Canadian ownership or control;

(b) assist the corporation to comply with any prescribed law; or

(c) attain or maintain a level of Canadian ownership specified in its articles.

(2) Subsection 46(2) of the French version of the Act is replaced by the following:

29. The definition “fiduciary” in subsection 48(2) of the Act is replaced by the following:

“fiduciary”

« représentant »

“fiduciary” means any person acting in a fiduciary capacity and includes a personal representative of a deceased person;

30. (1) Subsection 49(2) of the Act is replaced by the following:

Marginal note:Maximum fee for certificate by regulation

(2) A corporation may charge a fee, not exceeding the prescribed amount, for a security certificate issued in respect of a transfer.

(2) Subsections 49(4) and (5) of the Act are replaced by the following:

Marginal note:Signatures

(4) A security certificate shall be signed by at least one of the following persons, or the signature shall be printed or otherwise mechanically reproduced on the certificate:

(a) a director or officer of the corporation;

(b) a registrar, transfer agent or branch transfer agent of the corporation, or an individual on their behalf; and

(c) a trustee who certifies it in accordance with a trust indenture.

Marginal note:1994, c. 24, par. 34(1)(c)(F)

(3) Paragraph 49(7)(b) of the Act is replaced by the following:

(b) the words “Incorporated under the Canada Business Corporations Act” or “subject to the Canada Business Corporations Act”;

Marginal note:1991, c. 47, s. 721

(4) Subsections 49(8) to (10) of the Act are replaced by the following:

Marginal note:Restrictions

(8) No restriction, charge, agreement or endorsement described in the following paragraphs is effective against a transferee of a security, issued by a corporation or by a body corporate before the body corporate was continued under this Act, who has no actual knowledge of the restriction, charge, agreement or endorsement unless it or a reference to it is noted conspicuously on the security certificate:

(a) a restriction on transfer other than a constraint under section 174;

(b) a charge in favour of the corporation;

(c) a unanimous shareholder agreement; or

(d) an endorsement under subsection 190(10).

Marginal note:Limit on restriction

(9) A distributing corporation, any of the issued shares of which remain outstanding and are held by more than one person, shall not have a restriction on the transfer or ownership of its shares of any class or series except by way of a constraint permitted under section 174.

Marginal note:Notation of constraint

(10) Where the articles of a corporation constrain the issue, transfer or ownership of shares of any class or series in order to assist

(a) the corporation or any of its affiliates or associates to qualify under any prescribed law of Canada or a province to receive licences, permits, grants, payments or other benefits by reason of attaining or maintaining a specified level of Canadian ownership or control, or

(b) the corporation to comply with any prescribed law,

the constraint, or a reference to it, shall be conspicuously noted on every security certificate of the corporation evidencing a share that is subject to the constraint where the security certificate is issued after the day on which the share becomes subject to the constraint under this Act.

31. (1) Paragraphs 51(2)(a) and (b) of the Act are replaced by the following:

(a) the heir of a deceased security holder, or the personal representative of the heirs, or the personal representative of the estate of a deceased security holder;

(b) a personal representative of a registered security holder who is an infant, an incompetent person or a missing person; or

(2) Subsection 51(5) of the Act is replaced by the following:

Marginal note:Persons less than eighteen years of age

(5) If a person who is less than eighteen years of age exercises any rights of ownership in the securities of a corporation, no subsequent repudiation or avoidance is effective against the corporation.

(3) Subsection 51(8) of the Act is replaced by the following:

Marginal note:Excepted transmissions

(8) Despite subsection (7), if the laws of the jurisdiction governing the transmission of a security of a deceased holder do not require a grant of probate or of letters of administration in respect of the transmission, a personal representative of the deceased holder is entitled, subject to any applicable law relating to the collection of taxes, to become a registered holder or to designate a registered holder, if the personal representative deposits with the corporation or its transfer agent

(a) the security certificate that was owned by the deceased holder; and

(b) reasonable proof of the governing laws, of the deceased holder’s interest in the security and of the right of the personal representative or the person designated by the personal representative to become the registered holder.

32. Paragraph 65(1)(d) of the English version of the Act is replaced by the following:

(d) if a person described in paragraph (a) is an individual and is without capacity to act by reason of death, incompetence, minority, or other incapacity, the person’s fiduciary;

33. Section 75 of the French version of the Act is replaced by the following:

102. (1) Subject to any unanimous shareholder agreement, the directors shall manage, or supervise the management of, the business and affairs of a corporation.

Marginal note:Number of directors

(2) A corporation shall have one or more directors but a distributing corporation, any of the issued securities of which remain outstanding and are held by more than one person, shall have not fewer than three directors, at least two of whom are not officers or employees of the corporation or its affiliates.

36. Subsection 103(1) of the French version of the Act is replaced by the following:

(3) Subject to subsection (3.1), at least twenty-five per cent of the directors of a corporation must be resident Canadians. However, if a corporation has less than four directors, at least one director must be a resident Canadian.

Marginal note:Exception — Canadian ownership or control

(3.1) If a corporation engages in an activity in Canada in a prescribed business sector or if a corporation, by an Act of Parliament or by a regulation made under an Act of Parliament, is required, either individually or in order to engage in an activity in Canada in a particular business sector, to attain or maintain a specified level of Canadian ownership or control, or to restrict, or to comply with a restriction in relation to, the number of voting shares that any one shareholder may hold, own or control, then a majority of the directors of the corporation must be resident Canadians.

Marginal note:Clarification

(3.2) Nothing in subsection (3.1) shall be construed as reducing any requirement for a specified number or percentage of resident Canadian directors that otherwise applies to a corporation referred to in that subsection.

Marginal note:If only one or two directors

(3.3) If a corporation referred to in subsection (3.1) has only one or two directors, that director or one of the two directors, as the case may be, must be a resident Canadian.

(2) The portion of subsection 105(4) of the Act before paragraph (a) is replaced by the following:

Marginal note:Exception for holding corporation

(4) Despite subsection (3.1), not more than one third of the directors of a holding corporation referred to in that subsection need be resident Canadians if the holding corporation earns in Canada directly or through its subsidiaries less than five per cent of the gross revenues of the holding corporation and all of its subsidiary bodies corporate together as shown in

38. (1) Subsection 106(1) of the Act is replaced by the following:

Marginal note:Notice of directors

106. (1) At the time of sending articles of incorporation, the incorporators shall send to the Director a notice of directors in the form that the Director fixes, and the Director shall file the notice.

Marginal note:1994, c. 24, s. 11

(2) Subsections 106(7) and (8) of the Act are replaced by the following:

Marginal note:Vacancy among candidates

(7) If a meeting of shareholders fails to elect the number or the minimum number of directors required by the articles by reason of the lack of consent, disqualification, incapacity or death of any candidates, the directors elected at that meeting may exercise all the powers of the directors if the number of directors so elected constitutes a quorum.

Marginal note:Appointment of directors

(8) The directors may, if the articles of the corporation so provide, appoint one or more additional directors, who shall hold office for a term expiring not later than the close of the next annual meeting of shareholders, but the total number of directors so appointed may not exceed one third of the number of directors elected at the previous annual meeting of shareholders.

Marginal note:Election or appointment as director

(9) An individual who is elected or appointed to hold office as a director is not a director and is deemed not to have been elected or appointed to hold office as a director unless

(a) he or she was present at the meeting when the election or appointment took place and he or she did not refuse to hold office as a director; or

(b) he or she was not present at the meeting when the election or appointment took place and

(i) he or she consented to hold office as a director in writing before the election or appointment or within ten days after it, or

(ii) he or she has acted as a director pursuant to the election or appointment.

39. Paragraphs 107(g) and (h) of the English version of the Act are replaced by the following:

(g) a director may be removed from office only if the number of votes cast in favour of the director’s removal is greater than the product of the number of directors required by the articles and the number of votes cast against the motion; and

(h) the number of directors required by the articles may be decreased only if the votes cast in favour of the motion to decrease the number of directors is greater than the product of the number of directors required by the articles and the number of votes cast against the motion.

40. Section 109 of the Act is amended by adding the following after subsection (3):

Marginal note:Resignation (or removal)

(4) If all of the directors have resigned or have been removed without replacement, a person who manages or supervises the management of the business and affairs of the corporation is deemed to be a director for the purposes of this Act.

Marginal note:Exception

(5) Subsection (4) does not apply to

(a) an officer who manages the business or affairs of the corporation under the direction or control of a shareholder or other person;

(b) a lawyer, notary, accountant or other professional who participates in the management of the corporation solely for the purpose of providing professional services; or

(c) a trustee in bankruptcy, receiver, receiver-manager or secured creditor who participates in the management of the corporation or exercises control over its property solely for the purpose of the realization of security or the administration of a bankrupt’s estate, in the case of a trustee in bankruptcy.

41. Subsections 111(1) to (3) of the Act are replaced by the following:

Marginal note:Filling vacancy

111. (1) Despite subsection 114(3), but subject to subsections (3) and (4), a quorum of directors may fill a vacancy among the directors, except a vacancy resulting from an increase in the number or the minimum or maximum number of directors or a failure to elect the number or minimum number of directors provided for in the articles.

Marginal note:Calling meeting

(2) If there is not a quorum of directors or if there has been a failure to elect the number or minimum number of directors provided for in the articles, the directors then in office shall without delay call a special meeting of shareholders to fill the vacancy and, if they fail to call a meeting or if there are no directors then in office, the meeting may be called by any shareholder.

Marginal note:Class director

(3) If the holders of any class or series of shares of a corporation have an exclusive right to elect one or more directors and a vacancy occurs among those directors,

(a) subject to subsection (4), the remaining directors elected by the holders of that class or series of shares may fill the vacancy except a vacancy resulting from an increase in the number or the minimum or maximum number of directors for that class or series or from a failure to elect the number or minimum number of directors provided for in the articles for that class or series; or

(b) if there are no remaining directors any holder of shares of that class or series may call a meeting of the holders of shares of that class or series for the purpose of filling the vacancy.

42. Subsection 113(1) of the Act is replaced by the following:

Marginal note:Notice of change of director or director’s address

113. (1) A corporation shall, within fifteen days after

(a) a change is made among its directors, or

(b) it receives a notice of change of address of a director referred to in subsection (1.1),

send to the Director a notice, in the form that the Director fixes, setting out the change, and the Director shall file the notice.

Marginal note:Director’s change of address

(1.1) A director shall, within fifteen days after changing his or her address, send the corporation a notice of that change.

43. (1) Subsections 114(3) and (4) of the Act are replaced by the following:

Marginal note:Canadian directors present at meetings

(3) Directors, other than directors of a corporation referred to in subsection 105(4), shall not transact business at a meeting of directors unless,

(a) if the corporation is subject to subsection 105(3), at least twenty-five per cent of the directors present are resident Canadians or, if the corporation has less than four directors, at least one of the directors present is a resident Canadian; or

(b) if the corporation is subject to subsection 105(3.1), a majority of directors present are resident Canadians or if the corporation has only two directors, at least one of the directors present is a resident Canadian.

Marginal note:Exception

(4) Despite subsection (3), directors may transact business at a meeting of directors where the number of resident Canadian directors, required under that subsection, is not present if

(a) a resident Canadian director who is unable to be present approves in writing, or by telephonic, electronic or other communication facility, the business transacted at the meeting; and

(b) the required number of resident Canadian directors would have been present had that director been present at the meeting.

(2) Subsection 114(9) of the Act is replaced by the following:

Marginal note:Participation

(9) Subject to the by-laws, a director may, in accordance with the regulations, if any, and if all the directors of the corporation consent, participate in a meeting of directors or of a committee of directors by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting. A director participating in such a meeting by such means is deemed for the purposes of this Act to be present at that meeting.

44. (1) Subsection 115(2) of the Act is repealed.

(2) Paragraphs 115(3)(b) and (c) of the Act are replaced by the following:

(b) fill a vacancy among the directors or in the office of auditor, or appoint additional directors;

(c) issue securities except as authorized by the directors;

(c.1) issue shares of a series under section 27 except as authorized by the directors;

(3) Paragraph 115(3)(f) of the Act is replaced by the following:

(f) pay a commission referred to in section 41 except as authorized by the directors;

45. Section 117 of the Act is amended by adding the following after subsection (2):

Marginal note:Evidence

(3) Unless a ballot is demanded, an entry in the minutes of a meeting to the effect that the chairperson of the meeting declared a resolution to be carried or defeated is, in the absence of evidence to the contrary, proof of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution.

46. (1) Subsection 118(1) of the English version of the Act is replaced by the following:

Marginal note:Directors’ liability

118. (1) Directors of a corporation who vote for or consent to a resolution authorizing the issue of a share under section 25 for a consideration other than money are jointly and severally, or solidarily, liable to the corporation to make good any amount by which the consideration received is less than the fair equivalent of the money that the corporation would have received if the share had been issued for money on the date of the resolution.

(2) Subsection 118(2) of the Act is replaced by the following:

Marginal note:Further directors’ liabilities

(2) Directors of a corporation who vote for or consent to a resolution authorizing any of the following are jointly and severally, or solidarily, liable to restore to the corporation any amounts so distributed or paid and not otherwise recovered by the corporation:

(a) a purchase, redemption or other acquisition of shares contrary to section 34, 35 or 36;

(b) a commission contrary to section 41;

(c) a payment of a dividend contrary to section 42;

(d) a payment of an indemnity contrary to section 124; or

(e) a payment to a shareholder contrary to section 190 or 241.

(3) Subsection 118(4) of the Act is replaced by the following:

Marginal note:Recovery

(4) A director liable under subsection (2) is entitled to apply to a court for an order compelling a shareholder or other recipient to pay or deliver to the director any money or property that was paid or distributed to the shareholder or other recipient contrary to section 34, 35, 36, 41, 42, 124, 190 or 241.

(4) Paragraph 118(5)(a) of the Act is replaced by the following:

(a) order a shareholder or other recipient to pay or deliver to a director any money or property that was paid or distributed to the shareholder or other recipient contrary to section 34, 35, 36, 41, 42, 124, 190 or 241;

47. (1) Subsection 119(1) of the English version of the Act is replaced by the following:

Marginal note:Liability of directors for wages

119. (1) Directors of a corporation are jointly and severally, or solidarily, liable to employees of the corporation for all debts not exceeding six months wages payable to each such employee for services performed for the corporation while they are such directors respectively.

(2) Subsection 119(5) of the French version of the Act is replaced by the following:

120. (1) A director or an officer of a corporation shall disclose to the corporation, in writing or by requesting to have it entered in the minutes of meetings of directors or of meetings of committees of directors, the nature and extent of any interest that he or she has in a material contract or material transaction, whether made or proposed, with the corporation, if the director or officer

(a) is a party to the contract or transaction;

(b) is a director or an officer, or an individual acting in a similar capacity, of a party to the contract or transaction; or

(c) has a material interest in a party to the contract or transaction.

Marginal note:Time of disclosure for director

(2) The disclosure required by subsection (1) shall be made, in the case of a director,

(a) at the meeting at which a proposed contract or transaction is first considered;

(b) if the director was not, at the time of the meeting referred to in paragraph (a), interested in a proposed contract or transaction, at the first meeting after he or she becomes so interested;

(c) if the director becomes interested after a contract or transaction is made, at the first meeting after he or she becomes so interested; or

(d) if an individual who is interested in a contract or transaction later becomes a director, at the first meeting after he or she becomes a director.

Marginal note:Time of disclosure for officer

(3) The disclosure required by subsection (1) shall be made, in the case of an officer who is not a director,

(a) immediately after he or she becomes aware that the contract, transaction, proposed contract or proposed transaction is to be considered or has been considered at a meeting;

(b) if the officer becomes interested after a contract or transaction is made, immediately after he or she becomes so interested; or

(c) if an individual who is interested in a contract later becomes an officer, immediately after he or she becomes an officer.

Marginal note:Time of disclosure for director or officer

(4) If a material contract or material transaction, whether entered into or proposed, is one that, in the ordinary course of the corporation’s business, would not require approval by the directors or shareholders, a director or officer shall disclose, in writing to the corporation or request to have it entered in the minutes of meetings of directors or of meetings of committees of directors, the nature and extent of his or her interest immediately after he or she becomes aware of the contract or transaction.

Marginal note:Voting

(5) A director required to make a disclosure under subsection (1) shall not vote on any resolution to approve the contract or transaction unless the contract or transaction unless the contract or transaction

(a) relates primarily to his or her remuneration as a director, officer, employee or agent of the corporation or an affiliate;

(b) is for indemnity or insurance under section 124; or

(c) is with an affiliate.

Marginal note:Continuing disclosure

(6) For the purposes of this section, a general notice to the directors declaring that a director or an officer is to be regarded as interested, for any of the following reasons, in a contract or transaction made with a party, is a sufficient declaration of interest in relation to the contract or transaction:

(a) the director or officer is a director or officer, or acting in a similar capacity, of a party referred to in paragraph (1)(b) or (c);

(b) the director or officer has a material interest in the party; or

(c) there has been a material change in the nature of the director’s or the officer’s interest in the party.

Marginal note:Access to disclosures

(6.1) The shareholders of the corporation may examine the portions of any minutes of meetings of directors or of committees of directors that contain disclosures under this section, and any other documents that contain those disclosures, during the usual business hours of the corporation.

Marginal note:Avoidance standards

(7) A contract or transaction for which disclosure is required under subsection (1) is not invalid, and the director or officer is not accountable to the corporation or its shareholders for any profit realized from the contract or transaction, because of the director’s or officer’s interest in the contract or transaction or because the director was present or was counted to determine whether a quorum existed at the meeting of directors or committee of directors that considered the contract or transaction, if

(a) disclosure of the interest was made in accordance with subsections (1) to (6);

(b) the directors approved the contract or transaction; and

(c) the contract or transaction was reasonable and fair to the corporation when it was approved.

Marginal note:Confirmation by shareholders

(7.1) Even if the conditions of subsection (7) are not met, a director or officer, acting honestly and in good faith, is not accountable to the corporation or to its shareholders for any profit realized from a contract or transaction for which disclosure is required under subsection (1), and the contract or transaction is not invalid by reason only of the interest of the director or officer in the contract or transaction, if

(a) the contract or transaction is approved or confirmed by special resolution at a meeting of the shareholders;

(b) disclosure of the interest was made to the shareholders in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and

(c) the contract or transaction was reasonable and fair to the corporation when it was approved or confirmed.

Marginal note:Application to court

(8) If a director or an officer of a corporation fails to comply with this section, a court may, on application of the corporation or any of its shareholders, set aside the contract or transaction on any terms that it thinks fit, or require the director or officer to account to the corporation for any profit or gain realized on it, or do both those things.

49. Paragraph 121(a) of the French version of the Act is replaced by the following:

(4) A director is not liable under section 118 or 119, and has complied with his or her duties under subsection 122(2), if the director exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

(a) financial statements of the corporation represented to the director by an officer of the corporation or in a written report of the auditor of the corporation fairly to reflect the financial condition of the corporation; or

(b) a report of a person whose profession lends credibility to a statement made by the professional person.

Marginal note:Defence — good faith

(5) A director has complied with his or her duties under subsection 122(1) if the director relied in good faith on

(a) financial statements of the corporation represented to the director by an officer of the corporation or in a written report of the auditor of the corporation fairly to reflect the financial condition of the corporation; or

(b) a report of a person whose profession lends credibility to a statement made by the professional person.

51. Section 124 of the Act is replaced by the following:

Marginal note:Indemnification

124. (1) A corporation may indemnify a director or officer of the corporation, a former director or officer of the corporation or another individual who acts or acted at the corporation’s request as a director or officer, or an individual acting in a similar capacity, of another entity, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding in which the individual is involved because of that association with the corporation or other entity.

Marginal note:Advance of costs

(2) A corporation may advance moneys to a director, officer or other individual for the costs, charges and expenses of a proceeding referred to in subsection (1). The individual shall repay the moneys if the individual does not fulfil the conditions of subsection (3).

Marginal note:Limitation

(3) A corporation may not indemnify an individual under subsection (1) unless the individual

(a) acted honestly and in good faith with a view to the best interests of the corporation, or, as the case may be, to the best interests of the other entity for which the individual acted as director or officer or in a similar capacity at the corporation’s request; and

(b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that the individual’s conduct was lawful.

Marginal note:Indemnification in derivative actions

(4) A corporation may with the approval of a court, indemnify an individual referred to in subsection (1), or advance moneys under subsection (2), in respect of an action by or on behalf of the corporation or other entity to procure a judgment in its favour, to which the individual is made a party because of the individual’s association with the corporation or other entity as described in subsection (1) against all costs, charges and expenses reasonably incurred by the individual in connection with such action, if the individual fulfils the conditions set out in subsection (3).

Marginal note:Right to indemnity

(5) Despite subsection (1), an individual referred to in that subsection is entitled to indemnity from the corporation in respect of all costs, charges and expenses reasonably incurred by the individual in connection with the defence of any civil, criminal, administrative, investigative or other proceeding to which the individual is subject because of the individual’s association with the corporation or other entity as described in subsection (1), if the individual seeking indemnity

(a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that the individual ought to have done; and

(b) fulfils the conditions set out in subsection (3).

Marginal note:Insurance

(6) A corporation may purchase and maintain insurance for the benefit of an individual referred to in subsection (1) against any liability incurred by the individual

(a) in the individual’s capacity as a director or officer of the corporation; or

(b) in the individual’s capacity as a director or officer, or similar capacity, of another entity, if the individual acts or acted in that capacity at the corporation’s request.

Marginal note:Application to court

(7) A corporation, an individual or an entity referred to in subsection (1) may apply to a court for an order approving an indemnity under this section and the court may so order and make any further order that it sees fit.

Marginal note:Notice to Director

(8) An applicant under subsection (7) shall give the Director notice of the application and the Director is entitled to appear and be heard in person or by counsel.

Marginal note:Other notice

(9) On an application under subsection (7) the court may order notice to be given to any interested person and the person is entitled to appear and be heard in person or by counsel.

Marginal note:1994, c. 24, s. 14(F)

52. (1) The definition “distributing corporation” in subsection 126(1) of the Act is repealed.

(2) The definitions “insider” and “officer” in subsection 126(1) of the Act are replaced by the following:

“insider”

« initié »

“insider” means, except in section 131,

(a) a director or officer of a distributing corporation;

(b) a director or officer of a subsidiary of a distributing corporation;

(c) a director or officer of a body corporate that enters into a business combination with a distributing corporation; and

(d) a person employed or retained by a distributing corporation;

“officer”

« dirigeant »

“officer” means the chairperson of the board of directors, the president, a vice-president, the secretary, the treasurer, the comptroller, the general counsel, the general manager, a managing director, of an entity, or any other individual who performs functions for an entity similar to those normally performed by an individual occupying any of those offices;

(3) Subsection 126(1) of the Act is amended by adding the following in alphabetical order:

“business combination”

« regroupement d’entreprises »

“business combination” means an acquisition of all or substantially all the property of one body corporate by another, or an amalgamation of two or more bodies corporate, or any similar reorganization between or among two or more bodies corporate;

(4) Paragraph 126(2)(a) of the Act is replaced by the following:

(a) a director or an officer of a body corporate that beneficially owns, directly or indirectly, shares of a distributing corporation, or that exercises control or direction over shares of the distributing corporation, or that has a combination of any such ownership, control and direction, carrying more than the prescribed percentage of voting rights attached to all of the outstanding shares of the distributing corporation not including shares held by the body corporate as underwriter while those shares are in the course of a distribution to the public is deemed to be an insider of the distributing corporation;

(5) Subsections 126(3) and (4) of the Act are repealed.

53. Sections 127 to 129 of the Act are repealed.

54. Sections 130 and 131 of the Act are replaced by the following:

Marginal note:Prohibition of short sale

130. (1) An insider shall not knowingly sell, directly or indirectly, a security of a distributing corporation or any of its affiliates if the insider selling the security does not own or has not fully paid for the security to be sold.

Marginal note:Calls and puts

(2) An insider shall not knowingly, directly or indirectly, sell a call or buy a put in respect of a security of the corporation or any of its affiliates.

Marginal note:Exception

(3) Despite subsection (1), an insider may sell a security they do not own if they own another security convertible into the security sold or an option or right to acquire the security sold and, within ten days after the sale, they

(a) exercise the conversion privilege, option or right and deliver the security so acquired to the purchaser; or

(b) transfer the convertible security, option or right to the purchaser.

Marginal note:Offence

(4) An insider who contravenes subsection (1) or (2) is guilty of an offence and liable on summary conviction to a fine not exceeding the greater of one million dollars and three times the profit made, or to imprisonment for a term not exceeding six months or to both.

Marginal note:Definitions

131. (1) In this section, “insider” means, with respect to a corporation,

(a) the corporation;

(b) an affiliate of the corporation;

(c) a director or an officer of the corporation or of any person described in paragraph (b), (d) or (f);

(d) a person who beneficially owns, directly or indirectly, shares of the corporation or who exercises control or direction over shares of the corporation, or who has a combination of any such ownership, control and direction, carrying more than the prescribed percentage of voting rights attached to all of the outstanding shares of the corporation not including shares held by the person as underwriter while those shares are in the course of a distribution to the public;

(e) a person, other than a person described in paragraph (f), employed or retained by the corporation or by a person described in paragraph (f);

(f) a person who engages in or proposes to engage in any business or professional activity with or on behalf of the corporation;

(g) a person who received, while they were a person described in any of paragraphs (a) to (f), material confidential information concerning the corporation;

(h) a person who receives material confidential information from a person described in this subsection or in subsection (3) or (3.1), including a person described in this paragraph, and who knows or who ought reasonably to have known that the person giving the information is a person described in this subsection or in subsection (3) or (3.1), including a person described in this paragraph; and

(i) a prescribed person.

Expanded definition of “security”

(2) For the purposes of this section, the following are deemed to be a security of the corporation:

(a) a put, call, option or other right or obligation to purchase or sell a security of the corporation; and

(b) a security of another entity, the market price of which varies materially with the market price of the securities of the corporation.

Marginal note:Deemed insiders

(3) For the purposes of this section, a person who proposes to make a take-over bid (as defined in the regulations) for securities of a corporation, or to enter into a business combination with a corporation, is an insider of the corporation with respect to material confidential information obtained from the corporation and is an insider of the corporation for the purposes of subsection (6).

Marginal note:Deemed insiders

(3.1) An insider of a person referred to in subsection (3), and an affiliate or associate of such a person, is an insider of the corporation referred to in that subsection. Paragraphs (1)(b) to (i) apply in determining whether a person is such an insider except that references to “corporation” in those paragraphs are to be read as references to “person described in subsection (3)”.

Marginal note:Insider trading — compensation to persons

(4) An insider who purchases or sells a security of the corporation with knowledge of confidential information that, if generally known, might reasonably be expected to affect materially the value of any of the securities of the corporation is liable to compensate the seller of the security or the purchaser of the security, as the case may be, for any damages suffered by the seller or purchaser as a result of the purchase or sale, unless the insider establishes that

(a) the insider reasonably believed that the information had been generally disclosed;

(b) the information was known, or ought reasonably to have been known, by the seller or purchaser; or

(c) the purchase or sale of the security took place in the prescribed circumstances.

Marginal note:Insider trading — compensation to corporation

(5) The insider is accountable to the corporation for any benefit or advantage received or receivable by the insider as a result of a purchase or sale described in subsection (4) unless the insider establishes the circumstances described in paragraph (4)(a).

Marginal note:Tipping — compensation to persons

(6) An insider of the corporation who discloses to another person confidential information with respect to the corporation that has not been generally disclosed and that, if generally known, might reasonably be expected to affect materially the value of any of the securities of the corporation is liable to compensate for damages any person who subsequently sells securities of the corporation to, or purchases securities of the corporation from, any person that received the information, unless the insider establishes

(a) that the insider reasonably believed that the information had been generally disclosed;

(b) that the information was known, or ought reasonably to have been known, by the person who alleges to have suffered the damages;

(c) that the disclosure of the information was necessary in the course of the business of the insider, except if the insider is a person described in subsection (3) or (3.1); or

(d) if the insider is a person described in subsection (3) or (3.1), that the disclosure of the information was necessary to effect the take-over bid or the business combination, as the case may be.

Marginal note:Tipping — compensation to corporation

(7) The insider is accountable to the corporation for any benefit or advantage received or receivable by the insider as a result of a disclosure of the information as described in subsection (6) unless the insider establishes the circumstances described in paragraph (6)(a), (c) or (d).

Marginal note:Measure of damages

(8) The court may assess damages under subsection (4) or (6) in accordance with any measure of damages that it considers relevant in the circumstances. However, in assessing damages in a situation involving a security of a distributing corporation, the court must consider the following:

(a) if the plaintiff is a purchaser, the price paid by the plaintiff for the security less the average market price of the security over the twenty trading days immediately following general disclosure of the information; and

(b) if the plaintiff is a seller, the average market price of the security over the twenty trading days immediately following general disclosure of the information, less the price that the plaintiff received for the security.

Marginal note:Liability

(9) If more than one insider is liable under subsection (4) or (6) with respect to the same transaction or series of transactions, their liability is joint and several, or solidary.

Marginal note:Limitation

(10) An action to enforce a right created by subsections (4) to (7) may be commenced only within two years after discovery of the facts that gave rise to the cause of action.

55. Subsection 132(2) of the Act is replaced by the following:

Marginal note:Meeting outside Canada

(2) Despite subsection (1), a meeting of shareholders of a corporation may be held at a place outside Canada if the place is specified in the articles or all the shareholders entitled to vote at the meeting agree that the meeting is to be held at that place.

Marginal note:Exception

(3) A shareholder who attends a meeting of shareholders held outside Canada is deemed to have agreed to it being held outside Canada except when the shareholder attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully held.

Marginal note:Participation in meeting by electronic means

(4) Unless the by-laws otherwise provide, any person entitled to attend a meeting of shareholders may participate in the meeting, in accordance with the regulations, if any, by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting, if the corporation makes available such a communication facility. A person participating in a meeting by such means is deemed for the purposes of this Act to be present at the meeting.

Marginal note:Meeting held by electronic means

(5) If the directors or the shareholders of a corporation call a meeting of shareholders pursuant to this Act, those directors or shareholders, as the case may be, may determine that the meeting shall be held, in accordance with the regulations, if any, entirely by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting, if the by-laws so provide.

56. Section 133 of the Act is replaced by the following:

Marginal note:Calling annual meetings

133. (1) The directors of a corporation shall call an annual meeting of shareholders

(a) not later than eighteen months after the corporation comes into existence; and

(b) subsequently, not later than fifteen months after holding the last preceding annual meeting but no later than six months after the end of the corporation’s preceding financial year.

Marginal note:Calling special meetings

(2) The directors of a corporation may at any time call a special meeting of shareholders.

Marginal note:Order to delay calling of annual meeting

(3) Despite subsection (1), the corporation may apply to the court for an order extending the time for calling an annual meeting.

57. (1) Subsections 134(1) and (2) of the Act are replaced by the following:

Marginal note:Fixing record date

134. (1) The directors may, within the prescribed period, fix in advance a date as the record date for the purpose of determining shareholders

(a) entitled to receive payment of a dividend;

(b) entitled to participate in a liquidation distribution;

(c) entitled to receive notice of a meeting of shareholders;

(d) entitled to vote at a meeting of shareholders; or

(e) for any other purpose.

(2) The portion of subsection 134(3) of the Act before paragraph (a) is replaced by the following:

Marginal note:No record date fixed

(2) If no record date is fixed,

(3) The portion of subsection 134(4) of the Act before paragraph (a) is replaced by the following:

Marginal note:When record date fixed

(3) If a record date is fixed, unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register at the close of business on the day the directors fix the record date, notice of the record date must be given within the prescribed period

58. Subsections 135(1) and (2) of the Act are replaced by the following:

Marginal note:Notice of meeting

135. (1) Notice of the time and place of a meeting of shareholders shall be sent within the prescribed period to

(a) each shareholder entitled to vote at the meeting;

(b) each director; and

(c) the auditor of the corporation.

Marginal note:Exception — not a distributing corporation

(1.1) In the case of a corporation that is not a distributing corporation, the notice may be sent within a shorter period if so specified in the articles or by-laws.

Marginal note:Exception — shareholders not registered

(2) A notice of a meeting is not required to be sent to shareholders who were not registered on the records of the corporation or its transfer agent on the record date determined under paragraph 134(1)(c) or subsection 134(2), but failure to receive a notice does not deprive a shareholder of the right to vote at the meeting.

59. (1) Subsection 137(1) of the Act is replaced by the following:

Marginal note:Proposals

137. (1) Subject to subsections (1.1) and (1.2), a registered holder or beneficial owner of shares that are entitled to be voted at an annual meeting of shareholders may

(a) submit to the corporation notice of any matter that the person proposes to raise at the meeting (a “proposal”); and

(b) discuss at the meeting any matter in respect of which the person would have been entitled to submit a proposal.

Marginal note:Persons eligible to make proposals

(1.1) To be eligible to submit a proposal, a person

(a) must be, for at least the prescribed period, the registered holder or the beneficial owner of at least the prescribed number of outstanding shares of the corporation; or

(b) must have the support of persons who, in the aggregate, and including or not including the person that submits the proposal, have been, for at least the prescribed period, the registered holders, or the beneficial owners of, at least the prescribed number of outstanding shares of the corporation.

Marginal note:Information to be provided

(1.2) A proposal submitted under paragraph (1)(a) must be accompanied by the following information:

(a) the name and address of the person and of the person’s supporters, if applicable; and

(b) the number of shares held or owned by the person and the person’s supporters, if applicable, and the date the shares were acquired.

Marginal note:Information not part of proposal

(1.3) The information provided under subsection (1.2) does not form part of the proposal or of the supporting statement referred to in subsection (3) and is not included for the purposes of the prescribed maximum word limit set out in subsection (3).

Marginal note:Proof may be required

(1.4) If requested by the corporation within the prescribed period, a person who submits a proposal must provide proof, within the prescribed period, that the person meets the requirements of subsection (1.1).

(2) Subsection 137(3) of the Act is replaced by the following:

Marginal note:Supporting statement

(3) If so requested by the person who submits a proposal, the corporation shall include in the management proxy circular or attach to it a statement in support of the proposal by the person and the name and address of the person. The statement and the proposal must together not exceed the prescribed maximum number of words.

(3) Subsection 137(5) of the Act is replaced by the following:

Marginal note:Exemptions

(5) A corporation is not required to comply with subsections (2) and (3) if

(a) the proposal is not submitted to the corporation at least the prescribed number of days before the anniversary date of the notice of meeting that was sent to shareholders in connection with the previous annual meeting of shareholders;

(b) it clearly appears that the primary purpose of the proposal is to enforce a personal claim or redress a personal grievance against the corporation or its directors, officers or security holders;

(b.1) it clearly appears that the proposal does not relate in a significant way to the business or affairs of the corporation;

(c) not more than the prescribed period before the receipt of a proposal, a person failed to present, in person or by proxy, at a meeting of shareholders, a proposal that at the person’s request, had been included in a management proxy circular relating to the meeting;

(d) substantially the same proposal was submitted to shareholders in a management proxy circular or a dissident’s proxy circular relating to a meeting of shareholders held not more than the prescribed period before the receipt of the proposal and did not receive the prescribed minimum amount of support at the meeting; or

(e) the rights conferred by this section are being abused to secure publicity.

Marginal note:Corporation may refuse to include proposal

(5.1) If a person who submits a proposal fails to continue to hold or own the number of shares referred to in subsection (1.1) up to and including the day of the meeting, the corporation is not required to set out in the management proxy circular, or attach to it, any proposal submitted by that person for any meeting held within the prescribed period following the date of the meeting.

(4) Subsections 137(7) and (8) of the Act are replaced by the following:

Marginal note:Notice of refusal

(7) If a corporation refuses to include a proposal in a management proxy circular, the corporation shall, within the prescribed period after the day on which it receives the proposal or the day on which it receives the proof of ownership under subsection (1.4), as the case may be, notify in writing the person submitting the proposal of its intention to omit the proposal from the management proxy circular and of the reasons for the refusal.

Marginal note:Person may apply to court

(8) On the application of a person submitting a proposal who claims to be aggrieved by a corporation’s refusal under subsection (7), a court may restrain the holding of the meeting to which the proposal is sought to be presented and make any further order it thinks fit.

60. Subsections 138(1) to (3) of the Act are replaced by the following:

Marginal note:List of shareholders entitled to receive notice

138. (1) A corporation shall prepare an alphabetical list of its shareholders entitled to receive notice of a meeting, showing the number of shares held by each shareholder,

(a) if a record date is fixed under paragraph 134(1)(c), not later than ten days after that date; or

(b) if no record date is fixed, on the record date established under paragraph 134(2)(a).

Marginal note:Voting list — if record date fixed

(2) If a record date for voting is fixed under paragraph 134(1)(d), the corporation shall prepare, no later than ten days after the record date, an alphabetical list of shareholders entitled to vote as of the record date at a meeting of shareholders that shows the number of shares held by each shareholder.

Marginal note:Voting list — if no record date fixed

(3) If a record date for voting is not fixed under paragraph 134(1)(d), the corporation shall prepare, no later than ten days after a record date is fixed under paragraph 134(1)(c) or no later than the record date established under paragraph 134(2)(a), as the case may be, an alphabetical list of shareholders who are entitled to vote as of the record date that shows the number of shares held by each shareholder.

Marginal note:Entitlement to vote

(3.1) A shareholder whose name appears on a list prepared under subsection (2) or (3) is entitled to vote the shares shown opposite their name at the meeting to which the list relates.

61. Section 141 of the Act is amended by adding the following after subsection (2):

Marginal note:Electronic voting

(3) Despite subsection (1), unless the by-laws otherwise provide, any vote referred to in subsection (1) may be held, in accordance with the regulations, if any, entirely by means of a telephonic, electronic or other communication facility, if the corporation makes available such a communication facility.

Marginal note:Voting while participating electronically

(4) Unless the by-laws otherwise provide, any person participating in a meeting of shareholders under subsection 132(4) or (5) and entitled to vote at that meeting may vote, in accordance with the regulations, if any, by means of the telephonic, electronic or other communication facility that the corporation has made available for that purpose.

62. Section 142 of the Act is amended by adding the following after subsection (2):

Marginal note:Evidence

(3) Unless a ballot is demanded, an entry in the minutes of a meeting to the effect that the chairperson of the meeting declared a resolution to be carried or defeated is, in the absence of evidence to the contrary, proof of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution.

63. Paragraph 143(3)(a) of the Act is replaced by the following:

(a) a record date has been fixed under paragraph 134(1)(c) and notice of it has been given under subsection 134(3);

64. Subsection 144(1) of the Act is replaced by the following:

Marginal note:Meeting called by court

144. (1) A court, on the application of a director, a shareholder who is entitled to vote at a meeting of shareholders or the Director, may order a meeting of a corporation to be called, held and conducted in the manner that the court directs, if

(a) it is impracticable to call the meeting within the time or in the manner in which those meetings are to be called;

(b) it is impracticable to conduct the meeting in the manner required by this Act or the by-laws; or

(c) the court thinks that the meeting should be called, held and conducted within the time or in the manner it directs for any other reason.

65. Paragraph 145(2)(c) of the French version of the Act is replaced by the following:

145.1 A written agreement between two or more shareholders may provide that in exercising voting rights the shares held by them shall be voted as provided in the agreement.

Marginal note:Unanimous shareholder agreement

146. (1) An otherwise lawful written agreement among all the shareholders of a corporation, or among all the shareholders and one or more persons who are not shareholders, that restricts, in whole or in part, the powers of the directors to manage, or supervise the management of, the business and affairs of the corporation is valid.

Marginal note:Declaration by single shareholder

(2) If a person who is the beneficial owner of all the issued shares of a corporation makes a written declaration that restricts in whole or in part the powers of the directors to manage, or supervise the management of, the business and affairs of the corporation, the declaration is deemed to be a unanimous shareholder agreement.

Marginal note:Constructive party

(3) A purchaser or transferee of shares subject to a unanimous shareholder agreement is deemed to be a party to the agreement.

Marginal note:When no notice given

(4) If notice is not given to a purchaser or transferee of the existence of a unanimous shareholder agreement, in the manner referred to in subsection 49(8) or otherwise, the purchaser or transferee may, no later than 30 days after they become aware of the existence of the unanimous shareholder agreement, rescind the transaction by which they acquired the shares.

Marginal note:Rights of shareholder

(5) To the extent that a unanimous shareholder agreement restricts the powers of the directors to manage, or supervise the management of, the business and affairs of the corporation, parties to the unanimous shareholder agreement who are given that power to manage or supervise the management of the business and affairs of the corporation have all the rights, powers, duties and liabilities of a director of the corporation, whether they arise under this Act or otherwise, including any defences available to the directors, and the directors are relieved of their rights, powers, duties and liabilities, including their liabilities under section 119, to the same extent.

Marginal note:Discretion of shareholders

(6) Nothing in this section prevents shareholders from fettering their discretion when exercising the powers of directors under a unanimous shareholder agreement.

67. (1) The definition “registrant” in section 147 of the Act is repealed.

(2) The definition “solicit” or “ solicitation” in section 147 of the Act is replaced by the following:

“solicit” or “solicitation”

« sollicitation »

“solicit” or “solicitation”

(a) includes

(i) a request for a proxy whether or not accompanied by or included in a form of proxy,

(ii) a request to execute or not to execute a form of proxy or to revoke a proxy,

(iii) the sending of a form of proxy or other communication to a shareholder under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy, and

(iv) the sending of a form of proxy to a shareholder under section 149; but

(b) does not include

(i) the sending of a form of proxy in response to an unsolicited request made by or on behalf of a shareholder,

(ii) the performance of administrative acts or professional services on behalf of a person soliciting a proxy,

(iii) the sending by an intermediary of the documents referred to in section 153,

(iv) a solicitation by a person in respect of shares of which the person is the beneficial owner,

(v) a public announcement, as prescribed, by a shareholder of how the shareholder intends to vote and the reasons for that decision,

(vi) a communication for the purposes of obtaining the number of shares required for a shareholder proposal under subsection 137(1.1), or

(vii) a communication, other than a solicitation by or on behalf of the management of the corporation, that is made to shareholders, in any circumstances that may be prescribed;

(3) Section 147 of the Act is amended by adding the following in alphabetical order:

“intermediary”

« intermédiaire »

“intermediary” means a person who holds a security on behalf of another person who is not the registered holder of the security, and includes

(a) a securities broker or dealer required to be registered to trade or deal in securities under the laws of any jurisdiction;

(b) a securities depositary;

(c) a financial institution;

(d) in respect of a clearing agency, a securities dealer, trust company, bank or other person, including another clearing agency, on whose behalf the clearing agency or its nominees hold securities of an issuer;

(e) a trustee or administrator of a self-administered retirement savings plan, retirement income fund, education savings plan or other similar self-administered savings or investment plan registered under the Income Tax Act;

(f) a nominee of a person referred to in any of paragraphs (a) to (e); and

(g) a person who carries out functions similar to those carried out by individuals or entities referred to in any of paragraphs (a) to (e) and that holds a security registered in its name, or in the name of its nominee, on behalf of another person who is not the registered holder of the security.

68. Subsection 149(2) of the Act is replaced by the following:

Marginal note:Exception

(2) The management of the corporation is not required to send a form of proxy under subsection (1) if it

(a) is not a distributing corporation; and

(b) has fifty or fewer shareholders entitled to vote at a meeting, two or more joint holders being counted as one shareholder.

69. Section 150 of the Act is amended by adding the following after subsection (1):

(1.1) Despite subsection (1), a person may solicit proxies, other than by or on behalf of the management of the corporation, without sending a dissident’s proxy circular, if the total number of shareholders whose proxies are solicited is fifteen or fewer, two or more joint holders being counted as one shareholder.

Marginal note:Exception — solicitation by public broadcast

(1.2) Despite subsection (1), a person may solicit proxies, other than by or on behalf of the management of the corporation, without sending a dissident’s proxy circular if the solicitation is, in the prescribed circumstances, conveyed by public broadcast, speech or publication.

70. Subsections 151(1) and (2) of the Act are replaced by the following:

Marginal note:Exemption

151. (1) On the application of an interested person, the Director may exempt the person, on any terms that the Director thinks fit, from any of the requirements of section 149 or subsection 150(1), which exemption may have retrospective effect.

Marginal note:Publication

(2) The Director shall set out in a publication generally available to the public the particulars of exemptions granted under this section together with the reasons for the exemptions.

71. The portion of subsection 152(3) of the Act before paragraph (a) is replaced by the following:

Marginal note:Show of hands

(3) Despite subsections (1) and (2), if the chairperson of a meeting of shareholders declares to the meeting that, if a ballot is conducted, the total number of votes attached to shares represented at the meeting by proxy required to be voted against what to the knowledge of the chairperson will be the decision of the meeting in relation to any matter or group of matters is less than five per cent of all the votes that might be cast by shareholders personally or through proxy at the meeting on the ballot, unless a shareholder or proxyholder demands a ballot,

72. Section 153 of the Act is replaced by the following:

Marginal note:Duty of intermediary

153. (1) Shares of a corporation that are registered in the name of an intermediary or their nominee and not beneficially owned by the intermediary must not be voted unless the intermediary, without delay after receipt of the notice of the meeting, financial statements, management proxy circular, dissident’s proxy circular and any other documents other than the form of proxy sent to shareholders by or on behalf of any person for use in connection with the meeting, sends a copy of the document to the beneficial owner and, except when the intermediary has received written voting instructions from the beneficial owner, a written request for such instructions.

Marginal note:Restriction on voting

(2) An intermediary, or a proxyholder appointed by an intermediary, may not vote shares that the intermediary does not beneficially own and that are registered in the name of the intermediary or in the name of a nominee of the intermediary unless the intermediary or proxyholder, as the case may be, receives written voting instructions from the beneficial owner.

Marginal note:Copies

(3) A person by or on behalf of whom a solicitation is made shall provide, at the request of an intermediary, without delay, to the intermediary at the person’s expense the necessary number of copies of the documents referred to in subsection (1), other than copies of the document requesting voting instructions.

Marginal note:Instructions to intermediary

(4) An intermediary shall vote or appoint a proxyholder to vote any shares referred to in subsection (1) in accordance with any written voting instructions received from the beneficial owner.

Marginal note:Beneficial owner as proxyholder

(5) If a beneficial owner so requests and provides an intermediary with appropriate documentation, the intermediary must appoint the beneficial owner or a nominee of the beneficial owner as proxyholder.

Marginal note:Validity

(6) The failure of an intermediary to comply with this section does not render void any meeting of shareholders or any action taken at the meeting.

Marginal note:Limitation

(7) Nothing in this section gives an intermediary the right to vote shares that the intermediary is otherwise prohibited from voting.

Marginal note:Offence

(8) An intermediary who knowingly fails to comply with this section is guilty of an offence and liable on summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months or to both.

Marginal note:Officers, etc., of bodies corporate

(9) If an intermediary that is a body corporate commits an offence under subsection (8), any director or officer of the body corporate who knowingly authorized, permitted or acquiesced in the commission of the offence is a party to and guilty of the offence and is liable on summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months or to both, whether or not the body corporate has been prosecuted or convicted.

73. The heading before section 155 of the French version of the Act is replaced by the following:

PRÉSENTATION DE RENSEIGNEMENTS D’ORDRE FINANCIER74. Section 156 of the Act is replaced by the following:

Marginal note:Exemption

156. The Director may, on application of a corporation, authorize the corporation to omit from its financial statements any item prescribed, or to dispense with the publication of any particular financial statement prescribed, and the Director may, if the Director reasonably believes that disclosure of the information contained in the statements would be detrimental to the corporation, permit the omission on any reasonable conditions that the Director thinks fit.

75. Subsection 157(2) of the Act is replaced by the following:

Marginal note:Examination

(2) Shareholders of a corporation and their personal representatives may on request examine the statements referred to in subsection (1) during the usual business hours of the corporation and may make extracts free of charge.

76. Subsection 158(1) of the Act is replaced by the following:

Marginal note:Approval of financial statements

158. (1) The directors of a corporation shall approve the financial statements referred to in section 155 and the approval shall be evidenced by the manual signature of one or more directors or a facsimile of the signatures reproduced in the statements.

Marginal note:1994, c. 24, s. 17

77. Section 160 of the Act is replaced by the following:

Marginal note:Copies to Director

160. (1) A distributing corporation, any of the issued securities of which remain outstanding and are held by more than one person, shall send a copy of the documents referred to in section 155 to the Director

(a) not less than twenty-one days before each annual meeting of shareholders, or without delay after a resolution referred to in paragraph 142(1)(b) is signed; and

(b) in any event within fifteen months after the last preceding annual meeting should have been held or a resolution in lieu of the meeting should have been signed, but no later than six months after the end of the corporation’s preceding financial year.

Marginal note:Subsidiary corporation exemption

(2) A subsidiary corporation is not required to comply with this section if

(a) the financial statements of its holding corporation are in consolidated or combined form and include the accounts of the subsidiary; and

(b) the consolidated or combined financial statements of the holding corporation are included in the documents sent to the Director by the holding corporation in compliance with this section.

Marginal note:Offence

(3) A corporation that fails to comply with this section is guilty of an offence and is liable on summary conviction to a fine not exceeding five thousand dollars.

78. (1) Section 161 of the Act is amended by adding the following after subsection (2):

Marginal note:Business partners

(2.1) For the purposes of subsection (2), a person’s business partner includes a shareholder of that person.

(2) Subsection 161(5) of the French version of the Act is replaced by the following:

163. (1) The shareholders of a corporation that is not a distributing corporation may resolve not to appoint an auditor.

80. Subsection 168(6) of the Act is replaced by the following:

Marginal note:Other statements

(5.1) In the case of a proposed replacement of an auditor, whether through removal or at the end of the auditor’s term, the following rules apply with respect to other statements:

(a) the corporation shall make a statement on the reasons for the proposed replacement; and

(b) the proposed replacement auditor may make a statement in which he or she comments on the reasons referred to in paragraph (a).

Marginal note:Circulating statement

(6) The corporation shall send a copy of the statements referred to in subsections (5) and (5.1) without delay to every shareholder entitled to receive notice of a meeting referred to in subsection (1) and to the Director, unless the statement is included in or attached to a management proxy circular required by section 150.

81. Section 170 of the Act is amended by adding the following after subsection (2):

Marginal note:No civil liability

(3) A person who in good faith makes an oral or written communication under subsection (1) or (2) is not liable in any civil proceeding arising from having made the communication.

82. Subsection 171(2) of the Act is replaced by the following:

Marginal note:Exemption

(2) The Director may, on the application of a corporation, authorize the corporation to dispense with an audit committee, and the Director may, if satisfied that the shareholders will not be prejudiced, permit the corporation to dispense with an audit committee on any reasonable conditions that the Director thinks fit.

83. (1) Paragraph 173(1)(b) of the Act is replaced by the following:

(b) change the province in which its registered office is situated;

(2) Paragraph 173(1)(c) of the French version of the Act is replaced by the following:

84. (1) The portion of subsection 174(1) of the Act before paragraph (a) is replaced by the following:

Marginal note:Constraints on shares

174. (1) Subject to sections 176 and 177, a distributing corporation, any of the issued shares of which remain outstanding and are held by more than one person, may by special resolution amend its articles in accordance with the regulations to constrain

Marginal note:1991, c. 47, s. 722(2)

(2) Paragraph 174(1)(d) of the Act is replaced by the following:

(d) the issue, transfer or ownership of shares of any class or series in order to assist the corporation to comply with any prescribed law.

85. Subsection 177(1) of the Act is replaced by the following:

Marginal note:Delivery of articles

177. (1) Subject to any revocation under subsection 173(2) or 174(5), after an amendment has been adopted under section 173, 174 or 176 articles of amendment in the form that the Director fixes shall be sent to the Director.

86. (1) Subsection 180(1) of the English version of the Act is replaced by the following:

Marginal note:Restated articles

180. (1) The directors may at any time, and shall when reasonably so directed by the Director, restate the articles of incorporation.

(2) Subsection 180(2) of the Act is replaced by the following:

Marginal note:Delivery of articles

(2) Restated articles of incorporation in the form that the Director fixes shall be sent to the Director.

87. Subsections 183(3) and (4) of the Act are replaced by the following:

Marginal note:Right to vote

(3) Each share of an amalgamating corporation carries the right to vote in respect of an amalgamation agreement whether or not it otherwise carries the right to vote.

Marginal note:Class vote

(4) The holders of shares of a class or series of shares of each amalgamating corporation are entitled to vote separately as a class or series in respect of an amalgamation agreement if the amalgamation agreement contains a provision that, if contained in a proposed amendment to the articles, would entitle such holders to vote as a class or series under section 176.

Marginal note:1994, c. 24, s. 20

88. (1) Subparagraph 184(1)(b)(ii) of the Act is replaced by the following:

(ii) except as may be prescribed, the articles of amalgamation shall be the same as the articles of the amalgamating holding corporation, and

(2) Subparagraph 184(2)(b)(ii) of the Act is replaced by the following:

(ii) except as may be prescribed, the articles of amalgamation shall be the same as the articles of the amalgamating subsidiary corporation whose shares are not cancelled, and

89. Subsection 185(1) of the Act is replaced by the following:

Marginal note:Sending of articles

185. (1) Subject to subsection 183(6), after an amalgamation has been adopted under section 183 or approved under section 184, articles of amalgamation in the form that the Director fixes shall be sent to the Director together with the documents required by sections 19 and 106.

Marginal note:1994, c. 24, s. 21

90. Subsection 186.1(4) of the Act is replaced by the following:

Marginal note:Notice deemed to be articles

(4) For the purposes of section 262, a notice referred to in subsection (3) is deemed to be articles that are in the form that the Director fixes.

91. (1) Subsection 187(3) of the Act is replaced by the following:

Marginal note:Articles of continuance

(3) Articles of continuance in the form that the Director fixes shall be sent to the Director together with the documents required by sections 19 and 106.

(2) Subsection 187(11) of the French version of the Act is replaced by the following:

92. (1) Subsections 188(1) to (2.1) of the Act are replaced by the following:

Marginal note:Continuance — other jurisdictions

188. (1) Subject to subsection (10), a corporation may apply to the appropriate official or public body of another jurisdiction requesting that the corporation be continued as if it had been incorporated under the laws of that other jurisdiction if the corporation

(a) is authorized by the shareholders in accordance with this section to make the application; and

(b) establishes to the satisfaction of the Director that its proposed continuance in the other jurisdiction will not adversely affect creditors or shareholders of the corporation.

Marginal note:Continuance — other federal Acts

(2) A corporation that is authorized by the shareholders in accordance with this section may apply to the appropriate Minister for its continuance under the Bank Act, the Canada Cooperatives Act, the Insurance Companies Act or the Trust and Loan Companies Act.

(2) Subsection 188(8) of the Act is replaced by the following:

Marginal note:Notice deemed to be articles

(8) For the purposes of section 262, a notice referred to in subsection (7) is deemed to be articles that are in the form that the Director fixes.

93. (1) The portion of subsection 189(1) of the Act before paragraph (a) is replaced by the following:

Marginal note:Borrowing powers

189. (1) Unless the articles or by-laws of or a unanimous shareholder agreement relating to a corporation otherwise provide, the directors of a corporation may, without authorization of the shareholders,

(2) Paragraphs 189(1)(b) and (c) of the Act are replaced by the following:

(2) Subsection 190(1) of the Act is amended by striking out the word “or” at the end of paragraph (d), by adding the word “or” at the end of paragraph (e) and by adding the following after paragraph (e):

(f) carry out a going-private transaction or a squeeze-out transaction.

(3) Section 190 of the Act is amended by adding the following after subsection (2):

Marginal note:If one class of shares

(2.1) The right to dissent described in subsection (2) applies even if there is only one class of shares.

95. Subsection 191(4) of the Act is replaced by the following:

Marginal note:Articles of reorganization

(4) After an order referred to in subsection (1) has been made, articles of reorganization in the form that the Director fixes shall be sent to the Director together with the documents required by sections 19 and 113, if applicable.

96. (1) Paragraph 192(1)(f) of the Act is replaced by the following:

(f) an exchange of securities of a corporation for property, money or other securities of the corporation or property, money or securities of another body corporate;

(f.1) a going-private transaction or a squeeze-out transaction in relation to a corporation;

(2) Subsection 192(3) of the French version of the Act is replaced by the following:

(6) After an order referred to in paragraph (4)(e) has been made, articles of arrangement in the form that the Director fixes shall be sent to the Director together with the documents required by sections 19 and 113, if applicable.

97. The heading before section 193 and sections 193 to 205 of the Act are replaced by the following:

GOING-PRIVATE TRANSACTIONS AND SQUEEZE-OUT TRANSACTIONS

Marginal note:Going-private transactions

193. A corporation may carry out a going-private transaction. However, if there are any applicable provincial securities laws, a corporation may not carry out a going-private transaction unless the corporation complies with those laws.

Marginal note:Squeeze-out transactions

194. A corporation may not carry out a squeeze-out transaction unless, in addition to any approval by holders of shares required by or under this Act or the articles of the corporation, the transaction is approved by ordinary resolution of the holders of each class of shares that are affected by the transaction, voting separately, whether or not the shares otherwise carry the right to vote. However, the following do not have the right to vote on the resolution:

(a) affiliates of the corporation; and

(b) holders of shares that would, following the squeeze-out transaction, be entitled to consideration of greater value or to superior rights or privileges than those available to other holders of shares of the same class.

98. The Act is amended by adding the following before section 206:

PART XVIICOMPULSORY AND COMPELLED ACQUISITIONS

99. (1) The portion of subsection 206(1) of the Act before the definition “dissenting offeree” is replaced by the following:

Marginal note:Definitions

206. (1) The definitions in this subsection apply in this Part.

(2) The definition “take-over bid” in subsection 206(1) of the Act is replaced by the following:

“take-over bid”

« offre d’achat visant à la mainmise »

“take-over bid” means an offer made by an offeror to shareholders of a distributing corporation at approximately the same time to acquire all of the shares of a class of issued shares, and includes an offer made by a distributing corporation to repurchase all of the shares of a class of its shares.

(3) Subsection 206(1) of the Act is amended by adding the following in alphabetical order:

“offer”

« pollicitation »

“offer” includes an invitation to make an offer.

“offeree”

« pollicité »

“offeree” means a person to whom a take-over bid is made.

“offeree corporation”

« société pollicitée »

“offeree corporation” means a distributing corporation whose shares are the object of a take-over bid.

“offeror”

« pollicitant »

“offeror” means a person, other than an agent, who makes a take-over bid, and includes two or more persons who, directly or indirectly,

(a) make take-over bids jointly or in concert; or

(b) intend to exercise jointly or in concert voting rights attached to shares for which a take-over bid is made.

“share”

« action »

“share” means a share, with or without voting rights, and includes

(a) a security currently convertible into such a share; and

(b) currently exercisable options and rights to acquire such a share or such a convertible security.

(4) Paragraph 206(3)(a) of the Act is replaced by the following:

(a) the offerees holding not less than ninety per cent of the shares to which the bid relates accepted the take-over bid;

(5) Paragraph 206(3)(d) of the Act is replaced by the following:

(d) a dissenting offeree who does not notify the offeror in accordance with subparagraph (5)(b)(ii) is deemed to have elected to transfer the shares to the offeror on the same terms that the offeror acquired the shares from the offerees who accepted the take-over bid; and

(6) Subsections 206(5) and (6) of the Act are replaced by the following:

Marginal note:Share certificate

(5) A dissenting offeree to whom an offeror’s notice is sent under subsection (3) shall, within twenty days after receiving the notice,

(a) send the share certificates of the class of shares to which the take-over bid relates to the offeree corporation; and

(b) elect

(i) to transfer the shares to the offeror on the terms on which the offeror acquired the shares of the offerees who accepted the take-over bid, or

(ii) to demand payment of the fair value of the shares in accordance with subsections (9) to (18) by notifying the offeror within those twenty days.

Marginal note:Deemed election

(5.1) A dissenting offeree who does not notify the offeror in accordance with subparagraph (5)(b)(ii) is deemed to have elected to transfer the shares to the offeror on the same terms on which the offeror acquired the shares from the offerees who accepted the take-over bid.

Marginal note:Payment

(6) Within twenty days after the offeror sends an offeror’s notice under subsection (3), the offeror shall pay or transfer to the offeree corporation the amount of money or other consideration that the offeror would have had to pay or transfer to a dissenting offeree if the dissenting offeree had elected to accept the take-over bid under subparagraph (5)(b)(i).

(7) Section 206 of the Act is amended by adding the following after subsection (7):

Marginal note:When corporation is offeror

(7.1) A corporation that is an offeror making a take-over bid to repurchase all of the shares of a class of its shares is deemed to hold in trust for the dissenting shareholders the money and other consideration that it would have had to pay or transfer to a dissenting offeree if the dissenting offeree had elected to accept the take-over bid under subparagraph (5)(b)(i), and the corporation shall, within twenty days after a notice is sent under subsection (3), deposit the money in a separate account in a bank or other body corporate any of whose deposits are insured by the Canada Deposit Insurance Corporation or guaranteed by the Quebec Deposit Insurance Board, and shall place the other consideration in the custody of a bank or such other body corporate.

(8) Subsections 206(8) and (9) of the Act are replaced by the following:

Marginal note:Duty of offeree corporation

(8) Within thirty days after the offeror sends a notice under subsection (3), the offeree corporation shall

(a) if the payment or transfer required by subsection (6) is made, issue to the offeror a share certificate in respect of the shares that were held by dissenting offerees;

(b) give to each dissenting offeree who elects to accept the take-over bid terms under subparagraph (5)(b)(i) and who sends share certificates as required by paragraph (5)(a) the money or other consideration to which the offeree is entitled, disregarding fractional shares, which may be paid for in money; and

(c) if the payment or transfer required by subsection (6) is made and the money or other consideration is deposited as required by subsection (7) or (7.1), send to each dissenting shareholder who has not sent share certificates as required by paragraph (5)(a) a notice stating that

(i) the dissenting shareholder’s shares have been cancelled,

(ii) the offeree corporation or some designated person holds in trust for the dissenting shareholder the money or other consideration to which that shareholder is entitled as payment for or in exchange for the shares, and

(iii) the offeree corporation will, subject to subsections (9) to (18), send that money or other consideration to that shareholder without delay after receiving the shares.

Marginal note:Application to court

(9) If a dissenting offeree has elected to demand payment of the fair value of the shares under subparagraph (5)(b)(ii), the offeror may, within twenty days after it has paid the money or transferred the other consideration under subsection (6), apply to a court to fix the fair value of the shares of that dissenting offeree.

(9) Subsection 206(13) of the French version of the Act is replaced by the following:

(a) all dissenting offerees referred to in subparagraph (5)(b)(ii) whose shares have not been acquired by the offeror shall be joined as parties and are bound by the decision of the court; and

(11) Paragraph 206(18)(a) of the Act is replaced by the following:

(a) fix the amount of money or other consideration that is required to be held in trust under subsection (7) or (7.1);

100. The Act is amended by adding the following after section 206:

Marginal note:Obligation to acquire shares

206.1 (1) If a shareholder holding shares of a distributing corporation does not receive an offeror’s notice under subsection 206(3), the shareholder may

(a) within ninety days after the date of termination of the take-over bid, or

(b) if the shareholder did not receive an offer pursuant to the take-over bid, within ninety days after the later of

(i) the date of termination of the take-over bid, and

(ii) the date on which the shareholder learned of the take-over bid,

require the offeror to acquire those shares.

Marginal note:Conditions

(2) If a shareholder requires the offeror to acquire shares under subsection (1), the offeror shall acquire the shares on the same terms under which the offeror acquired or will acquire the shares of the offerees who accepted the take-over bid.

Marginal note:1992, c. 27, par. 90(1)(h)

101. (1) Subsection 208(1) of the Act is replaced by the following:

Marginal note:Application of Part

208. (1) This Part, other than sections 209 and 212, does not apply to a corporation that is an insolvent person or a bankrupt as those terms are defined in subsection 2(1) of the Bankruptcy and Insolvency Act.

Marginal note:1992, c. 27, par. 90(1)(h)

(2) Subsection 208(2) of the English version of the Act is replaced by the following:

Marginal note:Staying proceedings

(2) Any proceedings taken under this Part to dissolve or to liquidate and dissolve a corporation shall be stayed if the corporation is at any time found, in a proceeding under the Bankruptcy and Insolvency Act, to be an insolvent person as defined in subsection 2(1) of that Act.

102. Subsections 209(2) to (4) of the Act are replaced by the following:

Marginal note:Articles of revival

(2) Articles of revival in the form that the Director fixes shall be sent to the Director.

Marginal note:Certificate of revival

(3) On receipt of articles of revival, the Director shall issue a certificate of revival in accordance with section 262, if

(a) the body corporate has fulfilled all conditions precedent that the Director considers reasonable; and

(b) there is no valid reason for refusing to issue the certificate.

Marginal note:Date of revival

(3.1) A body corporate is revived as a corporation under this Act on the date shown on the certificate of revival.

Marginal note:Rights preserved

(4) Subject to any reasonable terms that may be imposed by the Director, to the rights acquired by any person after its dissolution and to any changes to the internal affairs of the corporation after its dissolution, the revived corporation is, in the same manner and to the same extent as if it had not been dissolved,

(a) restored to its previous position in law, including the restoration of any rights and privileges whether arising before its dissolution or after its dissolution and before its revival; and

(b) liable for the obligations that it would have had if it had not been dissolved whether they arise before its dissolution or after its dissolution and before its revival.

Marginal note:Legal actions

(5) Any legal action respecting the affairs of a revived corporation taken between the time of its dissolution and its revival is valid and effective.

Definition of “interested person”

(6) In this section, “interested person” includes

(a) a shareholder, a director, an officer, an employee and a creditor of the dissolved corporation;

(b) a person who has a contractual relationship with the dissolved corporation;

(c) a person who, although at the time of dissolution of the corporation was not a person described in paragraph (a), would be such a person if a certificate of revival is issued under this section; and

(d) a trustee in bankruptcy for the dissolved corporation.

103. (1) Paragraph 210(3)(b) of the French version of the Act is replaced by the following:

(4) Articles of dissolution in the form that the Director fixes shall be sent to the Director.

104. (1) Subsection 211(4) of the Act is replaced by the following:

Marginal note:Statement of intent to dissolve

(4) A statement of intent to dissolve in the form that the Director fixes shall be sent to the Director.

(2) Paragraph 211(7)(b) of the Act is replaced by the following:

(b) without delay take reasonable steps to give notice of it in each province in Canada where the corporation was carrying on business at the time it sent the statement of intent to dissolve to the Director;

(3) Subsection 211(10) of the Act is replaced by the following:

Marginal note:Revocation

(10) At any time after issue of a certificate of intent to dissolve and before issue of a certificate of dissolution, a certificate of intent to dissolve may be revoked by sending to the Director a statement of revocation of intent to dissolve in the form that the Director fixes, if such revocation is approved in the same manner as the resolution under subsection (3).

(4) Subsection 211(14) of the Act is replaced by the following:

Marginal note:Articles of dissolution

(14) Articles of dissolution in the form that the Director fixes shall be sent to the Director.

Marginal note:1994, c. 24, s. 25

105. (1) Subsection 212(1) of the Act is replaced by the following:

Marginal note:Dissolution by Director

212. (1) Subject to subsections (2) and (3), the Director may

(a) dissolve a corporation by issuing a certificate of dissolution under this section if the corporation

(i) has not commenced business within three years after the date shown in its certificate of incorporation,

(ii) has not carried on its business for three consecutive years,

(iii) is in default for a period of one year in sending to the Director any fee, notice or document required by this Act, or

(iv) does not have any directors or is in the situation described in subsection 109(4); or

(b) apply to a court for an order dissolving the corporation, in which case section 217 applies.

Marginal note:1994, c. 24, s. 25

(2) Paragraph 212(2)(b) of the Act is replaced by the following:

(b) published notice of that decision in a publication generally available to the public.

(3) Subsection 212(3) of the Act is replaced by the following:

Marginal note:Certificate of dissolution

(3) Unless cause to the contrary has been shown or an order has been made by a court under section 246, the Director may, after the expiration of the period referred to in subsection (2), issue a certificate of dissolution in the form that the Director fixes.

Marginal note:Exception — non-payment of incorporation fee

(3.1) Despite anything in this section, the Director may dissolve a corporation by issuing a certificate of dissolution if the required fee for the issuance of a certificate of incorporation has not been paid.

106. Subsection 213(4) of the Act is replaced by the following:

Marginal note:Certificate

(4) On receipt of an order under this section, section 212 or 214, the Director shall

(a) if the order is to dissolve the corporation, issue a certificate of dissolution in the form that the Director fixes; or

(b) if the order is to liquidate and dissolve the corporation under the supervision of the court, issue a certificate of intent to dissolve in the form that the Director fixes and publish notice of the order in a publication generally available to the public.

107. (1) The portion of paragraph 214(1)(a) of the French version of the Act before subparagraph (i) is replaced by the following:

(b) an order appointing a liquidator, with or without security, fixing the liquidator’s remuneration and replacing a liquidator;

109. The portion of paragraph 221(b) of the Act before subparagraph (i) is replaced by the following:

(b) without delay publish notice by insertion once a week for two consecutive weeks in a newspaper published or distributed in the place where the corporation has its registered office and take reasonable steps to give notice of the appointment in each province where the corporation carries on business, requiring any person

110. Subsection 222(2) of the Act is replaced by the following:

Marginal note:Due diligence

(2) A liquidator is not liable if the liquidator exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

(a) financial statements of the corporation represented to the liquidator by an officer of the corporation or in a written report of the auditor of the corporation fairly to reflect the financial condition of the corporation; or

(b) a report of a person whose profession lends credibility to a statement made by the professional person.

111. Subsection 223(4) of the English version of the Act is replaced by the following:

Marginal note:Publication

(4) A liquidator shall give notice of their intention to make an application under subsection (2) to the Director, to each inspector appointed under section 217, to each shareholder and to any person who provided a security or fidelity bond for the liquidation, and shall publish the notice in a newspaper published or distributed in the place where the corporation has its registered office, or as otherwise directed by the court.

112. Subsection 226(1) of the Act is replaced by the following:

Definition of “shareholder”

226. (1) In this section, “shareholder” includes the heirs and personal representatives of a shareholder.

113. (1) Subsections 229(1) and (2) of the French version of the Act are replaced by the following:

(2) The portion of subsection 235(3) of the Act before paragraph (a) is replaced by the following:

Marginal note:Publication

(3) The Director shall publish in a publication generally available to the public the particulars of information obtained by the Director under this section, if the particulars

115. The Act is amended by adding the following after section 237:

PART XIX.1 APPORTIONING AWARD OF DAMAGES

Interpretation and Application

Marginal note:Definitions

237.1 The definitions in this section apply in this Part.

“financial interest”

« intérêt financier »

“financial interest”, with respect to a corporation, includes

(a) a security;

(b) a title to or an interest in capital, assets, property, profits, earnings or royalties;

(c) an option or other interest in, or a subscription to, a security;

(d) an agreement under which the interest of the purchaser is valued for purposes of conversion or surrender by reference to the value of a proportionate interest in a specified portfolio of assets;

(e) an agreement providing that money received will be repaid or treated as a subscription for shares, units or interests at the option of any person or the corporation;

(f) a profit-sharing agreement or certificate;

(g) a lease, claim or royalty in oil, natural gas or mining, or an interest in the lease, claim or royalty;

(h) an income or annuity contract that is not issued by an insurance company governed by an Act of Parliament or a law of a province;

(i) an investment contract; and

(j) anything that is prescribed to be a financial interest.

“financial loss”

« perte financière »

“financial loss” means a financial loss arising out of an error, omission or misstatement in financial information concerning a corporation that is required under this Act or the regulations.

“third party”

Marginal note:Version anglaise seulement

“third party” includes any subsequent party that is joined in proceedings before a court.

Marginal note:Application of Part

237.2 (1) This Part applies to the apportionment of damages awarded to a plaintiff for financial loss after a court has found more than one defendant or third party responsible for the financial loss.

Marginal note:Non-application of Part

(2) This Part does not apply to an award of damages to any of the following plaintiffs:

(a) Her Majesty in right of Canada or of a province;

(b) an agent of Her Majesty in right of Canada or of a province or a federal or provincial Crown corporation or government agency, unless a substantial part of its activities involves trading, including making investments in, securities or other financial instruments;

(c) a charitable organization, private foundation or public foundation within the meaning of subsection 149.1(1) of the Income Tax Act; or

(d) an unsecured creditor in respect of goods or services that the creditor provided to a corporation.

Apportionment of Damages

Marginal note:Degree of responsibility

237.3 (1) Subject to this section and sections 237.4 to 237.6, every defendant or third party who has been found responsible for a financial loss is liable to the plaintiff only for the portion of the damages that corresponds to their degree of responsibility for the loss.

Marginal note:Uncollectable amounts

(2) If any part of the damages awarded against a responsible defendant or third party is uncollectable, the court may, on the application of the plaintiff, reallocate that amount to the other responsible defendants or third parties, if the application is made within one year after the date that the judgment was made enforceable.

Marginal note:Reallocation

(3) The amount that may be reallocated to each of the other responsible defendants or third parties under subsection (2) is calculated by multiplying the uncollectable amount by the percentage that corresponds to the degree of responsibility of that defendant or third party for the total financial loss.

Marginal note:Maximum amount

(4) The maximum amount determined under subsection (3), in respect of any responsible defendant or third party, may not be more than fifty per cent of the amount originally awarded against that responsible defendant or third party.

Marginal note:Exception — fraud

237.4 (1) The plaintiff may recover the whole amount of the damages awarded by the court from any defendant or third party who has been held responsible for a financial loss if it was established that the defendant or third party acted fraudulently or dishonestly.

Marginal note:Contribution

(2) The defendant or third party referred to in subsection (1) is entitled to claim contribution from any other defendant or third party who is held responsible for the loss.

Joint and Several, or Solidary, Liability

Marginal note:Individual or personal body corporate

237.5 (1) Defendants and third parties referred to in subsection 237.2(1) are jointly and severally, or solidarily, liable for the damages awarded to a plaintiff who is an individual or a personal body corporate and who

(a) had a financial interest in a corporation on the day that an error, omission or misstatement in financial information concerning the corporation occurred, or acquired a financial interest in the period between the day that the error, omission or misstatement occurred and the day, as determined by the court, that it was generally disclosed; and

(b) has established that the value of the plaintiff’s total financial interest in the corporation was not more than the prescribed amount at the close of business on the day that the error, omission or misstatement occurred or at the close of business on any day that the plaintiff acquired a financial interest in the period referred to in paragraph (a).

Definition of “personal body corporate”

(2) In subsection (1), “personal body corporate” means a body corporate that is not actively engaged in any financial, commercial or industrial business and that is controlled by an individual or a group of individuals, each member of which is connected by blood relationship, adoption or marriage or by cohabiting with another member in a conjugal relationship.

Marginal note:Exception

(3) Subsection (1) does not apply when the plaintiff brings the action as a member of a partnership or other association or as a trustee in bankruptcy, liquidator or receiver of a body corporate.

Marginal note:Equitable grounds

237.6 (1) If the value of the plaintiff’s total financial interest referred to in subsection 237.5(1) is greater than the prescribed amount, a court may nevertheless determine that the defendants and third parties are jointly and severally, or solidarily, liable if the court considers that it is just and reasonable to do so.

Marginal note:Factors

(2) The Governor in Council may establish factors that the court shall take into account in deciding whether to hold the defendants and third parties jointly and severally, or solidarily, liable.

Marginal note:Statutory Instruments Act

(3) The Statutory Instruments Act does not apply to the factors referred to in subsection (2), but the factors shall be published in Part I of the Canada Gazette.

Marginal note:Value of security

237.7 (1) When, in order to establish the value of the total financial interest referred to in subsection 237.5(1), it is necessary to determine the value of a security that is traded on an organized market, the value of the security is, on the day specified in subsection (3),

(a) the closing price of that class of security;

(b) if no closing price is given, the average of the highest and lowest prices of that class of security; or

(c) if the security was not traded, the average of the bid and ask prices of that class of security.

Marginal note:Court may adjust value

(2) The court may adjust the value of a security that has been determined under subsection (1) when the court considers it reasonable to do so.

Marginal note:Valuation day

(3) The value of the security is to be determined as of the day that the error, omission or misstatement occurred. If the security was acquired in the period between that day and the day, as determined by the court, that the error, omission or misstatement was generally disclosed, the value is to be determined as of the day that it was acquired.

Definition of “organized market”

(4) In this section, “organized market” means a recognized exchange for a class of securities or a market that regularly publishes the price of that class of securities in a publication that is generally available to the public.

Marginal note:Court determines value

237.8 (1) The court shall determine the value of all or any part of a financial interest that is subject to resale restrictions or for which there is no organized market.

Marginal note:Factors

(2) The Governor in Council may establish factors that the court may take into account in determining value under subsection (1).

Marginal note:Statutory Instruments Act

(3) The Statutory Instruments Act does not apply to the factors referred to in subsection (2), but the factors shall be published in Part I of the Canada Gazette.

Marginal note:Application to determine value

237.9 The plaintiff may, by application made at any time before or during the course of the proceedings, request the court to determine the value of the plaintiff’s financial interest for the purpose of subsection 237.5(1).

116. Paragraph 239(2)(a) of the Act is replaced by the following:

(a) the complainant has given notice to the directors of the corporation or its subsidiary of the complainant’s intention to apply to the court under subsection (1) not less than fourteen days before bringing the application, or as otherwise ordered by the court, if the directors of the corporation or its subsidiary do not bring, diligently prosecute or defend or discontinue the action;

117. (1) The portion of subsection 241(2) of the French version of the Act before paragraph (a) is replaced by the following:

246. A person who feels aggrieved by a decision of the Director referred to in any of paragraphs (a) to (g) may apply to a court for an order, including an order requiring the Director to change the decision

(a) to refuse to file in the form submitted any articles or other document required by this Act to be filed;

(b) to give a name, to change or revoke a name, or to refuse to reserve, accept, change or revoke a name under section 12;

(c) to grant, or to refuse to grant, an exemption that may be granted under this Act and the regulations;

(d) to refuse under subsection 187(11) to permit a continued reference to shares having a nominal or par value;

(e) to refuse to issue a certificate of discontinuance under section 188 or a certificate attesting that as of a certain date the corporation exists under subsection 263.1(2);

(f) to issue, or to refuse to issue, a certificate of revival under section 209, or the decision with respect to the terms for revival imposed by the Director;

(f.1) to correct, or to refuse to correct, articles, a notice, a certificate or other document under section 265;

(f.2) to cancel, or to refuse to cancel, the articles and related certificate under section 265.1; or

(g) to dissolve a corporation under section 212.

Marginal note:The Court may make any order it thinks fit.

120. Section 249 of the Act is replaced by the following:

Marginal note:Appeal of final order

249. (1) An appeal lies to the court of appeal of a province from any final order made by a court of that province under this Act.

Marginal note:Appeal with leave

(2) An appeal lies to the court of appeal of a province from any order other than a final order made by a court of that province, only with leave of the court of appeal in accordance with the rules applicable to that court.

121. The Act is amended by adding the following after section 252:

PART XX.1 DOCUMENTS IN ELECTRONIC OR OTHER FORM

Marginal note:Definitions

252.1 The definitions in this section apply in this Part.

“electronic document”

« document électronique »

“electronic document” means, except in section 252.6, any form of representation of information or of concepts fixed in any medium in or by electronic, optical or other similar means and that can be read or perceived by a person or by any means.

“information system”

« système d’information »

“information system” means a system used to generate, send, receive, store, or otherwise process an electronic document.

Marginal note:Application

252.2 This Part does not apply to a notice, document or other information sent to or issued by the Director pursuant to this Act or to any prescribed notice, document or other information.

Marginal note:Use not mandatory

252.3 (1) Nothing in this Act or the regulations requires a person to create or provide an electronic document.

Marginal note:Consent and other requirements

(2) Despite anything in this Part, a requirement under this Act or the regulations to provide a person with a notice, document or other information is not satisfied by the provision of an electronic document unless

(a) the addressee has consented, in the manner prescribed, and has designated an information system for the receipt of the electronic document; and

(3) An addressee may revoke the consent referred to in paragraph (2)(a) in the manner prescribed.

Marginal note:Creation and provision of information

252.4 A requirement under this Act or the regulations that a notice, document or other information be created or provided, is satisfied by the creation or provision of an electronic document if

(a) the by-laws or the articles of the corporation do not provide otherwise; and

(b) the regulations, if any, have been complied with.

Marginal note:Creation of information in writing

252.5 (1) A requirement under this Act or the regulations that a notice, document or other information be created in writing is satisfied by the creation of an electronic document if, in addition to the conditions in section 252.4,

(a) the information in the electronic document is accessible so as to be usable for subsequent reference; and

(b) the regulations pertaining to this subsection, if any, have been complied with.

Marginal note:Provision of information in writing

(2) A requirement under this Act or the regulations that a notice, document or other information be provided in writing is satisfied by the provision of an electronic document if, in addition to the conditions set out in section 252.4,

(a) the information in the electronic document is accessible by the addressee and capable of being retained by the addressee, so as to be usable for subsequent reference; and

(b) the regulations pertaining to this subsection, if any, have been complied with.

Marginal note:Copies

(3) A requirement under this Act or the regulations for one or more copies of a document to be provided to a single addressee at the same time is satisfied by the provision of a single version of the electronic document.

Marginal note:Registered mail

(4) A requirement under this Act or the regulations to provide a document by registered mail is not satisfied by the sending of an electronic document unless prescribed.

Marginal note:Statutory declarations and affidavits

252.6 (1) A statutory declaration or an affidavit required under this Act or the regulations may be created or provided in an electronic document if

(a) the person who makes the statutory declaration or affidavit signs it with his or her secure electronic signature;

(b) the authorized person before whom the statutory declaration or affidavit is made signs it with his or her secure electronic signature; and

(c) the requirements of sections 252.3 to 252.5 are complied with.

Marginal note:Definitions

(2) For the purposes of this section, “electronic document” and “secure electronic signature” have the same meaning as in subsection 31(1) of the Personal Information Protection and Electronic Documents Act.

Marginal note:Clarification

(3) For the purpose of complying with paragraph (1)(c), the references to an “electronic document” in sections 252.3 to 252.5 are to be read as references to an “electronic document” as defined in subsection 31(1) of the Personal Information Protection and Electronic Documents Act.

Marginal note:Signatures

252.7 A requirement under this Act or the regulations for a signature or for a document to be executed, except with respect to a statutory declaration or an affidavit, is satisfied if, in relation to an electronic document, the prescribed requirements pertaining to this section, if any, are met and if the signature results from the application by a person of a technology or a process that permits the following to be proven:

(a) the signature resulting from the use by a person of the technology or process is unique to the person;

(b) the technology or process is used by a person to incorporate, attach or associate the person’s signature to the electronic document; and

(c) the technology or process can be used to identify the person using the technology or process.

122. Subsection 253(4) of the Act is replaced by the following:

Marginal note:Undelivered notices

(4) If a corporation sends a notice or document to a shareholder in accordance with subsection (1) and the notice or document is returned on two consecutive occasions because the shareholder cannot be found, the corporation is not required to send any further notices or documents to the shareholder until the shareholder informs the corporation in writing of the shareholder’s new address.

123. Subsection 257(3) of the French version of the Act is replaced by the following:

124. Sections 258.1 and 258.2 of the Act are replaced by the following:

Marginal note:Content and form of notices and documents

258.1 The Director may establish the requirements for the content and fix the form, including electronic or other forms, of notices and documents sent to or issued by the Director pursuant to this Act, including

(a) the notices and documents that may be transmitted in electronic or other form;

(b) the persons or classes of persons who may transmit the notices and documents;

(c) their signature in electronic or other form, or their execution, adoption or authorization in a manner that is to have the same effect for the purposes of this Act as their signature;

(d) the time and circumstances when electronic notices and documents are to be considered to be sent or received, and the place where they are considered to have been sent or received; and

(e) any matter necessary for the purposes of the application of this section.

Marginal note:Exemption

258.2 In the prescribed circumstances, the Director may, on any conditions that the Director considers appropriate, exempt from the application of any provision of this Act requiring notices or documents to be sent to the Director any notices or documents or classes of notices or documents containing information similar to that contained in notices or documents required to be made public pursuant to any other Act of Parliament or to any Act of the legislature of a province as the Director specifies.

Marginal note:1994, c. 24, s. 27

125. Section 261 of the Act is replaced by the following:

Marginal note:Regulations

261. (1) The Governor in Council may make regulations

(a) prescribing any matter required or authorized by this Act to be prescribed;

(a.1) defining anything that, by this Act, is to be defined by regulation;

(b) requiring the payment of a fee in respect of the filing, examination or copying of any document, or in respect of any action that the Director is required or authorized to take under this Act, and prescribing the amount of the fee or the manner of determining the fee;

(c) respecting the payment of fees, including the time when and the manner in which the fees are to be paid, the additional fees that may be charged for the late payment of fees and the circumstances in which any fees previously paid may be refunded in whole or in part;

(c.1) prescribing, for the purposes of subsection 137(1.1), a manner of determining the number of shares required for a person to be eligible to submit a proposal, including the time and manner of determining a value or percentage of the outstanding shares of the corporation;

(d) prescribing, for the purposes of paragraph 137(5)(d), the minimum amount of support required in relation to the number of times the shareholder has submitted substantially the same proposal within the prescribed period;

(e) prescribing rules with respect to exemptions permitted by this Act;

(f) prescribing that, for the purpose of paragraph 155(1)(a), the standards as they exist from time to time, of an accounting body named in the regulations shall be followed;

(g) prescribing any matter necessary for the purposes of the application of Part XX.1, including the time and circumstances when an electronic document is to be considered to have been provided or received and the place where it is considered to have been provided or received;

(h) prescribing the manner of, and conditions for, participating in a meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting; and

(i) prescribing, for the purposes of subsection 141(3), the manner of, and conditions for, voting at a meeting of shareholders by means of a telephonic, electronic or other communication facility.

Marginal note:Incorporation by reference

(2) The regulations may incorporate any material by reference regardless of its source and either as it exists on a particular date or as amended from time to time.

Marginal note:Incorporated material is not a regulation

(3) Material does not become a regulation for the purposes of the Statutory Instruments Act because it is incorporated by reference.

126. The Act is amended by adding the following after section 261:

Marginal note:Fee to be paid before service performed

261.1 The fee in respect of the filing, examination, or copying of any document, or in respect of any action that the Director is required or authorized to take, shall be paid to the Director on the filing, examination, or copying or before the Director takes the action in respect of which the fee is payable.

Marginal note:1994, c. 24, s. 28(1)

127. (1) The portion of paragraph 262(2)(b) of the Act before subparagraph (i) is replaced by the following:

(b) on receiving the articles or statement in the form that the Director fixes, any other required documents and the required fees, the Director shall

Marginal note:1994, c. 24, s. 28(1)

(2) Subparagraphs 262(2)(b)(iv) and (v) of the Act are replaced by the following:

(iv) send the certificate, or a copy, image or photographic, electronic or other reproduction of the certificate, to the corporation or its agent, and

(v) publish a notice of the issuance of the certificate in a publication generally available to the public.

Marginal note:1994, c. 24, s. 29

128. Section 262.1 of the Act is renumbered as subsection 262.1(1) and is amended by adding the following:

Marginal note:Authority to sign notices

(2) The notices referred to in subsections 19(2) and (4) and subsections 106(1) and 113(1), and the annual return referred to in section 263, may be signed by any individual who has the relevant knowledge of the corporation and who is authorized to do so by the directors, or, in the case of the notice referred to in subsection 106(1), the incorporators.

Marginal note:Execution of documents

(3) Any articles, notice, resolution, requisition, statement or other document required or permitted to be executed or signed by more than one individual for the purposes of this Act may be executed or signed in several documents of like form, each of which is executed or signed by one or more of the individuals. The documents, when duly executed or signed by all individuals required or permitted, as the case may be, to do so, shall be deemed to constitute one document for the purposes of this Act.

129. Section 263 of the Act is replaced by the following:

Marginal note:Annual return

263. Every corporation shall, on the prescribed date, send to the Director an annual return in the form that the Director fixes and the Director shall file it.

Marginal note:Certificate

263.1 (1) The Director may provide any person with a certificate stating that a corporation

(a) has sent to the Director a document required to be sent under this Act;

(b) has paid all required fees; or

(c) exists as of a certain date.

Marginal note:Director may refuse to issue certificate of existence

(2) For greater certainty, the Director may refuse to issue a certificate described in paragraph (1)(c) if the Director has knowledge that the corporation is in default of sending a document required to be sent under this Act or is in default of paying a required fee.

130. Sections 265 and 266 of the Act are replaced by the following:

Marginal note:Corrections at request of Director

265. (1) If there is an error in articles, a notice, a certificate or other document, the directors or shareholders of the corporation shall, on the request of the Director, pass the resolutions and send to the Director the documents required to comply with this Act, and take such other steps as the Director may reasonably require so that the Director may correct the document.

Marginal note:No prejudice

(2) Before proceeding under subsection (1), the Director must be satisfied that the correction would not prejudice any of the shareholders or creditors of the corporation.

Marginal note:Corrections at the request of the corporation

(3) The Director may, at the request of the corporation or of any other interested person, accept a correction to any of the documents referred to in subsection (1) if

(a) the correction is approved by the directors of the corporation, unless the error is obvious or was made by the Director; and

(b) the Director is satisfied that the correction would not prejudice any of the shareholders or creditors of the corporation and that the correction reflects the original intention of the corporation or the incorporators, as the case may be.

Marginal note:Application to court

(4) If, in the view of the Director, of the corporation or of any interested person who wishes a correction, a correction to any of the documents referred to in subsection (1) would prejudice any of the shareholders or creditors of a corporation, the Director, the corporation or the person, as the case may be, may apply to the court for an order that the document be corrected and for an order determining the rights of the shareholders or creditors.

Marginal note:Notice to Director

(5) An applicant under subsection (4) shall give the Director notice of the application, and the Director is entitled to appear and to be heard in person or by counsel.

Marginal note:Director may require surrender of document

(6) The Director may demand the surrender of the original document, and may issue a corrected certificate or file the corrected articles, notice or other document.

Marginal note:Date of corrected document

(7) A corrected document shall bear the date of the document it replaces unless

(a) the correction is made with respect to the date of the document, in which case the document shall bear the corrected date; or

(b) the court decides otherwise.

Marginal note:Notice

(8) If a corrected certificate materially amends the terms of the original certificate, the Director shall without delay give notice of the correction in a publication generally available to the public.

Marginal note:Cancellation of articles by Director

265.1 (1) In the prescribed circumstances, the Director may cancel the articles and related certificate of a corporation.

Marginal note:No prejudice

(2) Before proceeding under subsection (1), the Director must be satisfied that the cancellation would not prejudice any of the shareholders or creditors of the corporation.

Marginal note:Request to Director to cancel articles

(3) In the prescribed circumstances, the Director may, at the request of a corporation or of any other interested person, cancel the articles and related certificate of the corporation if

(a) the cancellation is approved by the directors of the corporation; and

(b) the Director is satisfied that the cancellation would not prejudice any of the shareholders or creditors of the corporation and that the cancellation reflects the original intention of the corporation or the incorporators, as the case may be.

Marginal note:Application to court

(4) If, in the view of the Director, of the corporation or of any interested person who wishes a cancellation, a cancellation of articles and a related certificate would prejudice any of the shareholders or creditors of a corporation, the Director, the corporation or the person, as the case may be, may apply to the court for an order that the articles and certificate be cancelled and for an order determining the rights of the shareholders or creditors.

Marginal note:Notice to Director

(5) An applicant under subsection (4) shall give the Director notice of the application, and the Director is entitled to appear and to be heard in person or by counsel.

Marginal note:Return of certificate

(6) The Director may demand the surrender of a cancelled certificate.

Marginal note:Inspection

266. (1) A person who has paid the required fee is entitled during usual business hours to examine a document required by this Act or the regulations to be sent to the Director, except a report sent to the Director under subsection 230(2), and to make copies of or extracts from it.

Marginal note:Copies

(2) The Director shall furnish any person with a copy, extract, certified copy or certified extract of a document required by this Act or the regulations to be sent to the Director, except a report sent under subsection 230(2).

131. Subsection 267(3) of the Act is replaced by the following:

Marginal note:Retention of records

(3) The Director is not required to produce any document, other than a certificate and attached articles or statement filed under section 262, after the expiration of the prescribed period.

Marginal note:1994, c. 24, s. 31

132. Subsection 267.1 of the Act is replaced by the following:

Marginal note:Form of publication

267.1 Information or notices required by this Act to be summarized in a publication generally available to the public or published by the Director may be made available to the public or published by any system of mechanical or electronic data processing or by any other information storage device that is capable of reproducing any required information or notice in intelligible form within a reasonable time.

(6) The Governor in Council may, by order, require that a body corporate incorporated by or under an Act of Parliament to which Part I or II of the Canada Corporations Act, chapter C-32 of the Revised Statutes of Canada, 1970, does not apply, apply for a certificate of continuance under section 187 within such period as may be prescribed except for the following:

(a) a bank;

(b) a company or society to which the Insurance Companies Act applies; and

(c) a company to which the Trust and Loan Companies Act applies.

Marginal note:1994, c. 24, s. 32

(2) Subsection 268(7) of the English version of the Act is replaced by the following:

Marginal note:Discretionary continuance — Canada Corporations Act

(7) A body corporate to which Part IV of the Canada Corporations Act, chapter C-32 of the Revised Statutes of Canada, 1970, applies, other than a body corporate that carries on a business referred to in paragraph (6)(b) or (c), may apply for a certificate of continuance under section 187.

Marginal note:1996, c. 10, s. 213

(3) Subsection 268(11) of the English version of the Act is replaced by the following:

Marginal note:Exception for railway companies

(11) A body corporate that is incorporated by or under a Special Act, as defined in section 87 of the Canada Transportation Act, may apply for a certificate of continuance under section 187.

Marginal note:Replacement of “appartenance” with “droit de propriété”

134. The French version of the Act is amended by replacing the word “appartenance” with the words “droit de propriété”, with the modifications that the circumstances require, in the following provisions:

(a) paragraph 6(1)(d);

(b) paragraph 173(1)(n);

(c) paragraph 174(1)(c);

(d) subsections 174(2), (3) and (4);

(e) subsection 174(6);

(f) paragraph 176(1)(h);

(g) subsection 176(3); and

(h) paragraph 190(1)(a).

Marginal note:Technical amendments

135. The English version of the Act is amended as set out in the schedule.

Marginal note:Review of Canada Business Corporations Act

136. A committee of the Senate, of the House of Commons or of both Houses of Parliament that is designated or established for the purpose shall, within five years after the coming into force of this section, and within every ten years thereafter, undertake a review of the provisions and operations of the Canada Business Corporations Act, and shall, within a reasonable period thereafter, cause to be laid before each House of Parliament a report thereon.

1998, c. 1 CANADA COOPERATIVES ACT

137. (1) The definitions “distributing cooperative”, “member loan”, “person” and “security” in subsection 2(1) of the Canada Cooperatives Act are replaced by the following:

“distributing cooperative”

« coopérative ayant fait appel au public »

“distributing cooperative” means, subject to subsections 4(4) and (5), a distributing cooperative as defined in the regulations.

“member loan”

« prêt de membre »

“member loan” means a loan required by the cooperative from its members as a condition of membership or to continue membership in the cooperative, and, for the purpose of Parts 8, 16, 17, 18.1 and 19 and subsection 163(2), a member loan is deemed to be a membership share issued at par value.

“person”

« personne »

“person” means an individual or an entity, and includes a personal representative.

“security”

« valeur mobilière »

“security” includes an investment share, a debt obligation of a cooperative and a certificate evidencing such a share or debt obligation and, for the purposes of section 173 and Parts 18.1 and 19, includes a membership share.

(2) Subsection 2(1) of the Act is amended by adding the following in alphabetical order:

“personal representative”

« représentant personnel »

“personal representative” means a person who stands in place of and represents another person including, but not limited to, a trustee, an executor, an administrator, a receiver, an agent, a liquidator of a succession, a guardian, a tutor, a curator, a mandatary or an attorney.

(3) Subsection 2(3) of the Act is replaced by the following:

Marginal note:Minors

(3) For the purposes of this Act, the word “minor” has the same meaning as in the applicable provincial law and, in the absence of any such law, has the same meaning as the word “child” in the United Nations Convention on the Rights of the Child, adopted in the United Nations General Assembly on November 20, 1989.

138. Subsections 4(4) to (6) of the Act are replaced by the following:

Marginal note:Exemptions — on application by cooperative

(4) On the application of a cooperative, the Director may determine that the cooperative is not or was not a distributing cooperative if the Director is satisfied that the determination would not be prejudicial to the public interest.

Marginal note:Exemptions — classes of cooperatives

(5) The Director may determine that a class of cooperatives are not or were not distributing cooperatives if the Director is satisfied that the determination would not be prejudicial to the public interest.

139. Subsection 8(1) of the Act is replaced by the following:

Marginal note:Incorporators

8. (1) An application for incorporation of a cooperative may be made by a minimum of three persons, or by one or more cooperative entities, who intend to be members of the cooperative.

140. Subsection 12(1) of the Act is amended by striking out the word “and” at the end of paragraph (b), by adding the word “and” at the end of paragraph (c) and by adding the following after paragraph (c):

(d) a notice that is required to be given under subsection 30(2) or 81(1) indicates that the cooperative, if it came into existence, would be in compliance with the Act.

141. (1) Subparagraphs 15(2)(a)(i) and (ii) of the Act are replaced by the following:

(i) the designation of the classes or regional groups of members, if any, who may be represented by delegates,

(ii) the procedure for altering classes or regional groups of members, if applicable, and

(2) Paragraph 15(2)(b) of the Act is replaced by the following:

(b) the division of members into classes or regional groups and, if so,

(i) the qualifications for membership in each class or regional group,

(ii) the conditions precedent to membership in each class or regional group,

(iii) the method, time and manner of withdrawing from a class or regional group or transferring membership from one class or regional group to another and any applicable conditions on a transfer, and

(iv) the conditions on which membership in a class or regional group ends;

142. Paragraph 16(b) of the Act is replaced by the following:

(b) contained undertakings by every member and the successors, assigns and personal representatives of every member to observe all the provisions of the articles and by-laws.

143. Paragraph 19(4)(a) of the Act is replaced by the following:

(a) make an order respecting the nature and extent of the obligations and liability under the contract of the cooperative and the person who entered into or purported to enter into the contract by or on behalf of the cooperative; and

144. Subsections 20(4) and (5) of the Act are replaced by the following:

Marginal note:Alternate form

(4) The name of a cooperative may be set out in its articles in an English form, a French form, an English form and a French form, or a combined English and French form, so long as the combined form meets the prescribed criteria. The cooperative may use and be legally designated by any such form.

145. (1) Subsection 28(1) of the Act is amended by adding the word “or” at the end of paragraph (e) and by replacing paragraphs (f) and (g) with the following:

(f) a sale, lease or exchange of all or substantially all of the property of the cooperative was not authorized.

(2) Subsection 28(2) of the English version of the Act is replaced by the following:

Marginal note:Exception

(2) Subsection (1) does not apply in respect of a person who has, or ought to have, knowledge of a situation described in that subsection by virtue of their relationship to the cooperative.

146. Subsection 31(3) of the Act is replaced by the following:

Marginal note:When records or registers kept outside Canada

(3) Despite subsection (1), but subject to the Income Tax Act, the Excise Tax Act, the Customs Act and any other Act administered by the Minister of National Revenue, a cooperative may keep all or any of its records mentioned in paragraphs (1)(a), (b), (c), (f) and (g) and (2)(a) and (b) at a place outside Canada, if

(a) the records are available for inspection, by means of a computer terminal or other technology, during regular office hours at the registered office or another office in Canada designated by the directors; and

(b) the cooperative provides the technical assistance to facilitate an inspection referred to in paragraph (a).

147. Subsection 32(4) of the Act is replaced by the following:

Marginal note:Inspection and copying of records by members, creditors and shareholders

(4) Members, creditors and shareholders of the cooperative, their personal representatives and the Director may examine the records referred to in paragraphs 31(1)(a), (b), (c) (f) and (g) during the usual business hours of the cooperative and may take extracts from the records, free of charge, or have copies of them made after payment of a reasonable fee.

148. Subsection 33(1) of the Act is replaced by the following:

Marginal note:Lists

33. (1) Members, shareholders and creditors of a cooperative and their personal representatives and, where the cooperative is a distributing cooperative, any other person, may request that the cooperative provide them with a list of members or shareholders, no later than ten days after the cooperative receives the affidavit referred to in subsection (2) and after payment of a reasonable fee.

149. Subsection 48(3) of Act is replaced by the following:

Marginal note:Participation in meeting by electronic means

(3) Unless the by-laws provide otherwise, a member or shareholder may participate in a meeting of the cooperative, in accordance with the regulations, if any, by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting, if the cooperative makes available such a communication facility.

Marginal note:Meeting held by electronic means

(3.1) If the directors of a cooperative, or any other person, call a meeting of the cooperative pursuant to this Act, those directors or that person, as the case may be, may determine that the meeting shall be held, in accordance with the regulations, if any, entirely by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting, if the by-laws so provide.

150. Subsection 50(3) of the Act is replaced by the following:

Marginal note:Order to delay calling of annual meeting

(3) Despite subsection (1), the cooperative may apply to the court for an order extending the time for calling an annual meeting.

151. (1) Subsection 51(1) of the Act is replaced by the following:

Marginal note:Record date

51. (1) The directors may, within the prescribed period, fix in advance a date as the record date for the determination of the members or shareholders who are entitled to receive payment of a dividend or for any other purpose except the right to receive notice of, or to vote at, a meeting.

(2) Subsections 51(3) and (4) of the Act are replaced by the following:

Marginal note:Record date — notice of shareholders’ meetings

(3) For the purpose of determining the shareholders who are entitled to receive notice of a meeting of the shareholders, the directors may, within the prescribed period, fix in advance a date as the record date for that determination.

Marginal note:Record date — voting at shareholders’ meetings

(4) For the purposes of determining the shareholders who are entitled to vote at a meeting of shareholders, the directors may, within the prescribed period, fix in advance a date as the record date for that determination.

(3) The portion of subsection 51(6) of the Act before paragraph (a) is replaced by the following:

Marginal note:If record date fixed

(6) If a record date with respect to shareholders is fixed under this section, unless notice of the date is waived by each shareholder whose name is set out in the securities register at the close of business on the day the directors fix the record date, notice of the record date must be given within the prescribed period

152. Subsection 52(1) of the Act is replaced by the following:

Marginal note:Notice of meetings

52. (1) Notice of the time and place of a meeting of a cooperative must be sent within the prescribed period

(a) to each person who is entitled to vote at the meeting;

(b) to each director; and

(c) to the auditor of the cooperative, if any.

Marginal note:Exception

(1.1) In the case of a cooperative that is not a distributing cooperative, the notice may be sent within a shorter period if so specified in the articles or the by-laws.

153. (1) Subsections 58(2) and (3) of the Act are replaced by the following:

Marginal note:Proposals by members or directors to amend articles

(2) Any member or director may, in accordance with section 290, make a proposal to amend the articles.

Marginal note:Proposals by other persons to amend articles

(2.1) Any other person may, in accordance with section 290, make a proposal to amend the articles if the person

(a) has been, for at least the prescribed period, the registered holder or the beneficial owner of at least the prescribed number of outstanding investment shares of the cooperative; or

(b) has the support of persons who, in the aggregate, and including or not including the person that submits the proposal, have been, for at least the prescribed period, the registered holders, or the beneficial owners of, at least the prescribed number of outstanding investment shares of the cooperative.

Marginal note:Information to be provided

(2.2) A proposal submitted by a person described in paragraph (2.1)(a) must be accompanied by the following information:

(a) the name and address of the person and of the person’s supporters, if applicable; and

(b) the number of investment shares held or owned by the person and by the person’s supporters, if applicable, and the date the investment shares were acquired.

Marginal note:Information not part of proposal

(2.3) The information provided under subsection (2.2) does not form part of the proposal or of the supporting statement referred to in subsection (3) and is not included for the purposes of the prescribed maximum word limit set out in subsection (3).

Marginal note:Proof may be required

(2.4) If requested by the cooperative within the prescribed period, a person who submits a proposal must provide proof, within the prescribed period, that the person meets the requirements of subsection (2.1).

Marginal note:Proposal and statement to accompany notice of meeting

(3) A proposal submitted for consideration at a meeting must be attached to the notice of the meeting, together with, if requested by the person making the proposal, a statement in support of the proposal and the name and address of person making the proposal. The statement and the proposal must together not exceed the prescribed maximum number of words.

(2) Paragraph 58(4)(a) of the Act is replaced by the following:

(a) the proposal is not submitted to the cooperative at least the prescribed number of days before the anniversary date of the notice of meeting that was sent to members and shareholders in connection with the previous annual meeting;

(3) Paragraph 58(4)(b) of the English version of the Act is replaced by the following:

(b) it clearly appears that the primary purpose of the proposal is to enforce a personal claim or redress a personal grievance against the cooperative or its directors, officers, members or security holders;

(4) Paragraphs 58(4)(c) and (d) of the Act are replaced by the following:

(c) not more than the prescribed period before the receipt of a proposal, a person failed to present, at a meeting, a proposal that, at the person’s request, had been attached by the cooperative to the notice of the meeting;

(d) substantially the same proposal was attached to a notice of meeting relating to a meeting of the cooperative held not more than the prescribed period before the receipt of the proposal and the proposal did not receive the prescribed minimum amount of support at the meeting; or

(5) Section 58 of the Act is amended by adding the following after subsection (4):

Marginal note:Cooperative may refuse to include proposal

(4.1) If

(a) a person described in subsection (2.1) makes a proposal and fails to continue to hold or own the number of investment shares referred to in that subsection up to and including the day of the meeting, or

(b) a member makes a proposal and, prior to the meeting, withdraws from membership in accordance with section 39,

the cooperative is not required to include in the notice of a meeting, or attach to it, any proposal submitted by that person for any meeting held within the prescribed period following the date of the meeting.

154. Subsections 60(1) and (2) of the Act are replaced by the following:

Marginal note:Refusal to include proposal

60. (1) If a cooperative refuses to include a proposal in a notice of a meeting referred to in section 52, the cooperative must, within the prescribed period after the day on which it receives the proposal or the day on which it receives the proof of ownership under subsection 58(2.4), as the case may be, notify in writing the person submitting the proposal of its intention to omit the proposal from the notice and of the reasons for the refusal.

Marginal note:Restraining order by court

(2) On the application of a person submitting a proposal who claims to be aggrieved by a cooperative’s refusal under subsection (1), a court may restrain the holding of the meeting at which the proposal is sought to be presented and make any further order it thinks fit.

155. Section 65 of the Act is amended by adding the following after subsection (2):

Marginal note:Electronic voting

(3) Despite subsection (1), unless the by-laws provide otherwise, any vote referred to in subsection (1) may be held, in accordance with the regulations, if any, entirely by means of a telephonic, electronic or other communication facility, if the cooperative makes available such a communication facility.

Marginal note:Voting while participating electronically

(4) Unless the by-laws otherwise provide, a member or shareholder participating in a meeting of the cooperative under subsection 48(3) or (3.1) and entitled to vote at that meeting may vote, in accordance with the regulations, if any, by means of the telephonic, electronic or other communication facility that the cooperative has made available for that purpose.

156. Section 67 of the Act is replaced by the following:

Marginal note:Evidence

67. Unless a ballot is demanded, an entry in the minutes of a meeting to the effect that the chairperson of the meeting declared a resolution to be carried or defeated is, in the absence of evidence to the contrary, proof of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution.

157. Section 70 of the Act is repealed.

158. Paragraphs 71(1)(a) and (b) of the Act are replaced by the following:

(a) it is not feasible to call the meeting within the time or in the manner in which those meetings are to be called;

(b) it is not feasible to conduct the meeting in the manner required by this Act or the by-laws; or

159. Subsection 78(4) of the Act is replaced by the following:

Marginal note:Resident in Canada

(4) At least twenty-five per cent of the directors must be resident in Canada. However, if the cooperative has only three directors, at least one director must be resident in Canada.

160. Subsections 83(6) and (7) of the Act are replaced by the following:

Marginal note:Election or appointment as director

(6) An individual who is elected or appointed to hold office as a director is not a director and is deemed not to have been elected or appointed to hold office as a director unless

(a) he or she was present at the meeting when the election or appointment took place and he or she did not refuse to hold office as a director; or

(b) he or she was not present at the meeting when the election or appointment took place and

(i) he or she consented to hold office as a director in writing before the election or appointment or within ten days after it, or

(ii) he or she has acted as a director pursuant to the election or appointment.

161. (1) The portion of subsection 85(1) of the Act before paragraph (a) is replaced by the following:

Marginal note:Vacancy on board

85. (1) Subject to subsection (3), if there is a vacancy on the board of directors, except a vacancy because of an increase in the number or the minimum or maximum number of directors provided for in the articles or because of a failure to elect or appoint the number or minimum number of directors provided for in the articles, and there is still a quorum on the board, the remaining directors may

(2) Subsection 85(6) of the Act is replaced by the following:

Marginal note:Deemed directors

(6) If all of the directors have resigned or been removed without replacement, a person who manages or supervises the management of the business and affairs of the cooperative is deemed to be a director for the purposes of this Act.

162. Section 91 of the Act is replaced by the following:

Marginal note:Notice of change of director or directors address

91. (1) A cooperative must, within fifteen days after

(a) a change is made among its directors, or

(b) it receives a notice of change of address of a director referred to in subsection (2),

send to the Director a notice, in the form that the Director fixes, setting out the change.

Marginal note:Directors change of address

(2) A director must, within fifteen days after changing his or her address, send the cooperative a notice of that change.

Marginal note:Application to court

(3) Any interested person, or the Director, may apply to a court for an order to require a cooperative to comply with subsection (1), and the court may so order and make any further order it thinks fit.

163. (1) Subsection 97(1) of the Act is replaced by the following:

Marginal note:Quorum

97. (1) To constitute a quorum,

(a) at least twenty-five per cent of the directors at the meeting must be resident in Canada or, if the cooperative has only three directors, at least one of the directors at the meeting must be resident in Canada; and

(b) a majority of the directors at the meeting must be members of the cooperative, or representatives of members that are entities or members of members that are cooperative entities.

(2) The portion of subsection 97(2) of the Act before paragraph (a) is replaced by the following:

Marginal note:Exception

(2) Despite subsection (1), a meeting of directors may be held without the number of directors resident in Canada required under that subsection if

(3) Paragraph 97(2)(b) of the Act is replaced by the following:

(b) the required number would have been present had that director been present at the meeting.

164. Subsection 98(1) of the Act is replaced by the following:

Marginal note:Participation

98. (1) Subject to the by-laws, a director may, in accordance with the regulations, if any, participate in a meeting of directors or of a committee of directors by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting.

165. Subsection 100(3) of the Act is replaced by the following:

Marginal note:Evidence

(3) Unless a ballot is demanded, an entry in the minutes of a meeting to the effect that the chairperson of the meeting declared a resolution to be carried or defeated is, in the absence of evidence to the contrary, proof of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution.

166. Paragraph 101(3)(d) of the Act is repealed.

167. (1) Subsection 102(2) of the Act is repealed.

(2) Subsection 102(7) of the French version of the Act is replaced by the following:

104. (1) A director who is interested in a contract or transaction referred to in subsection 103(1) may not vote on any resolution to approve the contract or transaction.

170. Sections 106 and 107 of the Act are replaced by the following:

Marginal note:Effect of disclosure

106. A contract or transaction for which disclosure is required under section 103 is not invalid, and the director or officer is not accountable to the cooperative, its members or its shareholders for any profit realized from the contract or transaction, because of the director’s or officer’s interest in the contract or transaction or because the director was present or was counted to determine whether a quorum existed at the meeting of directors or committee of directors that considered the contract or transaction, if

(a) disclosure of the interest was made in accordance with sections 103 to 105;

(b) the directors approved the contract or transaction; and

(c) the contract or transaction was reasonable and fair to the cooperative when it was approved.

Marginal note:Confirmation

106.1 Even if the conditions of section 106 are not met, a director or officer, acting honestly and in good faith, is not accountable to the cooperative, its members or its shareholders for any profit realized from a contract or transaction for which disclosure is required under section 103 and the contract or transaction is not invalid by reason only of the interest of the director or officer in the contract or transaction if

(a) the contract or transaction is approved or confirmed by special resolution at a meeting of the members;

(b) disclosure of the interest was made to the members in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and

(c) the contract or transaction was reasonable and fair to the cooperative when it was approved or confirmed.

Marginal note:Court order

107. If a director or officer of a cooperative fails to disclose an interest in a material contract or transaction in accordance with section 103, or otherwise fails to comply with sections 103 to 106.1, a court may, on the application of the cooperative or a member or shareholder, set aside the contract or transaction on any terms that it thinks fit or order that the director or officer account to the cooperative, its members or its shareholders for any profit realized from the contract or transaction.

171. (1) Paragraph 109(3)(g) of the Act is replaced by the following:

(g) pay a commission referred to in section 128, except as authorized by the directors;

(2) Subsection 109(3) of the Act is amended by striking out the word “or” at the end of paragraph (h), by adding the word “or” at the end of paragraph (i) and by adding the following after paragraph (i):

(j) issue investment shares of a series under section 126 except as authorized by the directors.

172. Section 111 of the Act is replaced by the following:

Marginal note:Due diligence

111. A director is not liable under this Part if the director exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

(a) financial statements of the cooperative represented to the director by an officer of the cooperative or in a written report of the auditor of the cooperative fairly to reflect the financial condition of the cooperative; or

(b) a report of a person whose profession lends credibility to a statement made by the professional person.

173. (1) Subsection 113(2) of the Act is replaced by the following:

Marginal note:Advance of costs

(2) A cooperative may advance moneys to a director, officer or other individual for the costs, charges and expenses of a proceeding referred to in subsection (1). The individual must repay the moneys if the individual did not fulfil the conditions of subsection (3), unless the members and shareholders decide, by separate resolutions, that the individual need not repay the moneys.

(2) Paragraph 113(5)(a) of the Act is replaced by the following:

(a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that the individual ought to have done; and

174. (1) Subsection 115(1) of the Act is replaced by the following:

Marginal note:Restricting powers of directors

115. (1) A provision in the articles of the cooperative or in a unanimous agreement that restricts, in whole or in part, the powers of the directors to manage, or supervise the management of, the business and affairs of the cooperative or vests, in whole or in part, but only in members and subject to subsection 76(1), those powers, is valid.

(2) Subsections 115(3) to (8) of the Act are replaced by the following:

Marginal note:Investment shareholders

(3) A purchaser or transferee of an investment share that is subject to a unanimous agreement is deemed to be party to the unanimous agreement.

Marginal note:When no notice given

(4) If notice is not given to the purchaser or transferee of the existence of a unanimous agreement, in the manner referred to in subsection 183(2) or otherwise, the purchaser or transferee may, no later than thirty days after they become aware of its existence, rescind the transaction by which they acquired the investment shares.

Marginal note:Rights of members

(5) To the extent that a provision in the articles of the cooperative, or in a unanimous agreement, restricts the powers of the directors to manage, or supervise the management of, the business and affairs of the cooperative, members who are given that power to manage or supervise the management of the business and affairs of the cooperative have all the rights, powers, duties and liabilities of directors, whether they arise under this Act or otherwise, including any defences available to the directors, and the directors are relieved of their rights, powers, duties and liabilities, including their liabilities under section 102, to the same extent.

Marginal note:Discretion of shareholders

(6) Nothing in this section prevents members from fettering their discretion when exercising the powers of directors under a unanimous agreement.

175. Subsection 123(1) of the Act is replaced by the following:

Marginal note:Charge on membership shares for amounts

123. (1) A cooperative has a charge on a membership share or any amount standing to the credit of a member or the personal representative of a member for a debt of that member to the cooperative.

176. The portion of subsection 126(1) of the Act before paragraph (a) is replaced by the following:

Marginal note:Shares in series

126. (1) The articles may authorize, subject to any limitations set out in them and subject to subsection (2), the issue of any class of investment shares in one or more series and may do either or both of the following:

177. Subsection 129(1) of the Act is replaced by the following:

Marginal note:Charge on investment shares

129. (1) Subject to subsection 183(2), the articles may provide that the cooperative has a charge on an investment share registered in the name of a shareholder or the personal representative of a shareholder for a debt of the shareholder to the cooperative, including an amount unpaid as of the date a body corporate was continued under this Act, in respect of an investment share issued by it.

178. (1) The portion of subsection 130(1) of the Act before paragraph (a) is replaced by the following:

Marginal note:Constraints on shares

130. (1) Subject to subsection 290(3), a distributing cooperative that has issued investment shares that remain outstanding and are held by more than one person may, by special resolution of the members and by a separate special resolution of the shareholders of each class, amend its articles to constrain

(2) Paragraph 130(1)(d) of the Act is replaced by the following:

(d) the issue, transfer or ownership of any investment share to assist the cooperative to comply with any prescribed law; or

179. (1) Paragraph 131(1)(b) of the Act is replaced by the following:

(b) complying with any prescribed law.

(2) Subsection 131(2) of the French version of the Act is replaced by the following:

(2) Paragraph 138(3)(a) of the Act is amended by striking out the word “or” at the end of subparagraph (i) and by adding the following after subparagraph (ii):

(iii) property of a person who, immediately before the exchange, dealt with the cooperative at arm’s length within the meaning of that expression in the Income Tax Act, if the person, the cooperative and all the holders of shares in the class or series of shares so issued consent to the exchange; or

(3) Subsection 138(6) of the Act is replaced by the following:

Marginal note:Membership share inclusion

(6) For greater certainty, if a cooperative issues membership shares with a par value, the cooperative is deemed, for the purposes of subsection 147(2), sections 151 and 154 and paragraph 299(2)(d), to have a stated capital account for its membership shares that includes each amount that has been received by the cooperative for the membership shares.

182. Subsection 139(4) of the Act is replaced by the following:

Marginal note:Continued cooperative

(4) For the purposes of subsection 147(2), sections 151 and 154 and paragraph 299(2)(d), when a cooperative is continued under this Act, its stated capital account is deemed to include the amount that would have been included if the cooperative had been incorporated under this Act.

183. The portion of subsection 147(2) of the French version of the Act before paragraph (a) is replaced by the following:

185. The definitions “intermediary” and “solicit” or “solicitation” ” in subsection 163(1) of the Act are replaced by the following:

“intermediary”

« intermédiaire »

“intermediary” means a person who holds a security on behalf of another person who is not the registered holder of the security, and includes

(a) a securities broker or dealer required to be registered to trade or deal in securities under the laws of any jurisdiction;

(b) a securities depositary;

(c) a financial institution;

(d) in respect of a clearing agency, a securities dealer, trust company, bank or other person, including another clearing agency, on whose behalf the clearing agency or its nominees hold securities of an issuer;

(e) a trustee or administrator of a self-administered retirement savings plan, retirement income fund, education savings plan or other similar self-administered savings or investment plan registered under the Income Tax Act;

(f) a nominee of a person referred to in any of paragraphs (a) to (e); and

(g) a person who carries out functions similar to those carried out by individuals or entities referred to in any of paragraphs (a) to (e) and that holds a security registered in its name, or in the name of its nominee, on behalf of another person who is not the registered holder of the security.

“solicit” or “solicitation”

« sollicitation »

“solicit” or “solicitation”

(a) includes

(i) a request for a proxy whether or not accompanied by or included in a form of proxy,

(ii) a request to execute or not to execute a form of proxy or to revoke a proxy,

(iii) the sending of a form of proxy or other communication to a shareholder under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy, and

(iv) the sending of a form of proxy to a shareholder under section 165; but

(b) does not include

(i) the sending of a form of proxy in response to an unsolicited request made by or on behalf of a shareholder,

(ii) the performance of administrative acts or professional services on behalf of a person soliciting a proxy,

(iii) the sending by an intermediary of the documents referred to in section 169,

(iv) a solicitation by a person in respect of investment shares of which they are the beneficial owner,

(v) a public announcement, as prescribed, by a shareholder of how the shareholder intends to vote and the reasons for that decision,

(vi) a communication for the purposes of obtaining the number of investment shares required for a proposal under subsection 58(2.1), or

(vii) a communication, other than a solicitation by or on behalf of the management of the cooperative, that is made to shareholders, in any circumstances that may be prescribed.

186. (1) Subsection 164(2) of the Act is replaced by the following:

Marginal note:Execution of proxy

(2) For a proxy to be valid, it must be executed by the shareholder or by their personal representative authorized in writing.

(2) The portion of paragraph 164(4)(a) of the Act before subparagraph (i) is replaced by the following:

(a) by depositing a document in writing executed by the shareholder or by their personal representative authorized in writing

187. Paragraph 165(2)(b) of the Act is replaced by the following:

(b) it has fifty or fewer shareholders entitled to vote at a meeting, two or more joint holders being counted as one shareholder.

188. Subsection 166(4) of the Act is replaced by the following:

Marginal note:Solicitation to fifteen or fewer shareholders

(4) Despite subsection (1), a person may solicit proxies, other than by or on behalf of the management of the cooperative, without sending a dissident’s proxy circular, if the total number of shareholders whose proxies are solicited is fifteen or fewer, two or more joint holders being counted as one shareholder.

Marginal note:Solicitation by public broadcast

(4.1) Despite subsection (1), a person may solicit proxies, other than by or on behalf of the management of the cooperative, without sending a dissident’s proxy circular, if the solicitation is, in the prescribed circumstances, conveyed by public broadcast, speech or publication.

189. Subsection 167(1) of the Act is replaced by the following:

Marginal note:Exemption order

167. (1) On the application of any interested person, the Director may exempt, on any terms that the Director thinks fit, the person from any of the requirements of section 165 or subsection 166(1), which exemption may have retrospective effect.

190. (1) Subsection 169(2) of the Act is replaced by the following:

Marginal note:Restriction on voting

(2) An intermediary, or a proxyholder appointed by an intermediary, may not vote shares that the intermediary does not beneficially own and that are registered in the name of the intermediary or in the name of a nominee of the intermediary unless the intermediary or proxyholder, as the case may be, receives written voting instructions from the beneficial owner.

(2) Subsection 169(5) of the Act is replaced by the following:

Marginal note:Beneficial owner as proxyholder

(5) If a beneficial owner so requests and provides an intermediary with appropriate documentation, the intermediary must appoint the beneficial owner or a nominee of the beneficial owner as proxyholder.

191. (1) The definitions “business combination”, “insider” and “officer” in subsection 171(1) of the Act are replaced by the following:

“business combination”

« regroupement d’entreprises »

“business combination” means an acquisition of all or substantially all the property of one entity by another, or an amalgamation of two or more entities, or any similar reorganization between or among two or more entities.

“insider”

« initié »

“insider” means, except in section 173,

(a) a director or officer of a distributing cooperative;

(b) a director or officer of a subsidiary of a distributing cooperative;

(c) a director or officer of an entity that enters into a business combination with a distributing cooperative; and

(d) a person employed or retained by a distributing cooperative.

“officer”

« dirigeant »

“officer” means the chairperson of the board of directors, president, vice-president, secretary, treasurer, comptroller, general counsel, general manager, managing director, or any other individual who performs functions for an entity similar to those normally performed by an individual occupying any of those offices.

(2) Paragraph 171(2)(a) of the Act is replaced by the following:

(a) a director or an officer of an entity that beneficially owns, directly or indirectly, shares of a distributing cooperative, or that exercises control or direction over shares of the distributing cooperative, or that has a combination of any such ownership, control and direction, carrying more than the prescribed percentage of voting rights attached to all of the outstanding shares of the distributing cooperative not including shares held by the entity as underwriter while those shares are in the course of a distribution to the public is deemed to be an insider of the distributing cooperative;

(3) Subsection 171(3) of the French version of the Act is replaced by the following:

172. (1) No insider shall knowingly sell, directly or indirectly, a security of a distributing cooperative or any of its affiliates if the insider selling the security does not own or has not fully paid for the security to be sold.

Marginal note:Calls and puts

(2) No insider shall knowingly, directly or indirectly, buy a put or sell a call in respect of a security of the cooperative or any of its affiliates.

Marginal note:Exception

(3) Despite subsection (1), an insider may sell a security that the insider does not own if the insider owns another security convertible into the security sold or an option or right to acquire the security sold and, no later than ten days after the sale, the insider

(a) exercises the conversion privilege, option or right and delivers the security so acquired to the purchaser; or

(b) transfers the convertible security, option or right to the purchaser.

193. Section 173 of the Act is replaced by the following:

Definition of “insider”

173. (1) In this section, “insider”, with respect to a cooperative, means

(a) the cooperative;

(b) an affiliate of the cooperative;

(c) a director or an officer of the cooperative or of any persons described in paragraphs (b), (e) or (g);

(d) a member who controls more than ten per cent of the voting rights that may be exercised to elect or appoint a director of the cooperative;

(e) a person who beneficially owns, directly or indirectly, shares of the cooperative or who exercises control or direction over shares of the cooperative, or a combination of any such ownership, control and direction, carrying more than the prescribed percentage of the voting rights attached to all of the outstanding shares of the cooperative other than shares held by the person as underwriter while those shares are in the course of a distribution to the public;

(f) a person, other than a person described in paragraph (g), employed or retained by the cooperative or by a person described in paragraph (g);

(g) a person who engages in or proposes to engage in any business or professional activity with or on behalf of the cooperative;

(h) a person who received, while they were a person described in any of paragraphs (a) to (g) material confidential information concerning the cooperative;

(i) a person who receives material confidential information from a person described in this subsection or in subsection (2) or (2.1), including from a person described in this paragraph, and who knows or who ought reasonably to have known that the person giving the information is a person described in this subsection or in subsection (2) or (2.1), including a person described in this paragraph; and

(j) a prescribed person.

Marginal note:Deemed insiders

(2) For the purposes of this section, a person who proposes to make a take-over bid (as defined in the regulations) for securities of a cooperative, or to enter into a business combination with a cooperative, is an insider of the cooperative with respect to material confidential information obtained from the cooperative and is an insider of the cooperative for the purposes of subsection (6).

Marginal note:Deemed insiders

(2.1) An insider of a person referred to in subsection (2), and an affiliate or associate of such a person, is an insider of the cooperative referred to in that subsection. Paragraphs (1)(b) to (j) apply in determining whether a person is such an insider except that references to “cooperative” in those paragraphs are to be read as references to “person described in subsection (2)”.

Expanded definition of “security”

(3) For the purposes of this section, the following are deemed to be a security of the cooperative:

(a) a put, call or option or other right or obligation to purchase or sell a security of the cooperative; and

(b) a security of another entity whose market price varies materially with the market price of the securities of the cooperative.

Marginal note:Insider trading — compensation to persons

(4) An insider who purchases or sells a security of the cooperative with knowledge of confidential information that, if generally known, might reasonably be expected to affect materially the value of any of the securities of the cooperative is liable to compensate the seller of the security or the purchaser of the security, as the case may be, for any damages suffered by the seller or purchaser as a result of the purchase or sale, unless the insider establishes that

(a) the insider reasonably believed that the information had been generally disclosed;

(b) the information was known, or ought reasonably to have been known, by the seller or purchaser; or

(c) the purchase or sale of the security took place in the prescribed circumstances.

Marginal note:Insider trading — compensation to cooperative

(5) The insider is accountable to the cooperative for any benefit or advantage received or receivable by the insider as a result of a purchase or sale described in subsection (4) unless the insider establishes the circumstances in paragraph 4(a).

Marginal note:Tipping — compensation to persons

(6) An insider who discloses to another person confidential information with respect to the cooperative that has not been generally disclosed and that, if generally known, might reasonably be expected to affect materially the value of any of the securities of the cooperative is liable to compensate for damages any person who subsequently sells securities of the cooperative to, or purchases securities of the cooperative from, any person that received the information, unless the insider establishes

(a) that the insider reasonably believed that the information had been generally disclosed;

(b) that the information was known, or ought reasonably to have been known, to the person who alleges to have suffered the damages;

(c) that the disclosure of the information was necessary in the course of the business of the insider, except if the insider is a person described in subsection (2) or (2.1); or

(d) if the insider is a person described in subsection (2) or (2.1), that the disclosure of the information was necessary to effect the take-over bid or the business combination, as the case may be.

Marginal note:Tipping — compensation to cooperative

(7) The insider is accountable to the cooperative for any benefit or advantage received or receivable by the insider as a result of a disclosure of the information as described in subsection (6) unless the insider establishes the circumstances in paragraph (6)(a), (c) or (d).

Marginal note:Measure of damages

(8) The court may assess damages under subsection (4) or (6) in accordance with any measure of damages that it considers relevant in the circumstances. However, in assessing damages in a situation involving a security of a distributing cooperative, the court must consider the following:

(a) if the plaintiff is a purchaser, the price paid by the plaintiff for the security less the average market price of the security over the twenty trading days immediately following general disclosure of the information; and

(b) if the plaintiff is a seller, the average market price of the security over the twenty trading days immediately following general disclosure of the information, less the price that the plaintiff received for the security.

Marginal note:Liability

(9) If more than one insider is liable under subsection (4) or (6) with respect to the same transaction or series of transactions, their liability is joint and several, or solidary.

Marginal note:Limitation

(10) An action to enforce a right created by subsections (4) to (7) may be commenced only within two years after discovery of the facts that gave rise to the cause of action.

194. The definitions “offeree cooperative” and “take-over bid” in section 174 of the Act are replaced by the following:

“offeree cooperative”

« coopérative pollicitée »

“offeree cooperative” means a distributing cooperative whose shares are the object of a take-over bid.

“take-over bid”

« offre d’achat »

“take-over bid” means an offer made by an offeror to shareholders of a distributing cooperative at approximately the same time to acquire all of the shares of a class of issued shares and includes an offer made by a distributing cooperative to repurchase all of the shares of a class of its shares.

195. (1) Subsection 175(8) of the English version of the Act is replaced by the following:

Marginal note:When cooperative is offeror

(8) A cooperative that is an offeror making a take-over bid to repurchase all of the shares of a class of its shares is deemed to hold in trust for the dissenting shareholders the amounts that it would have had to pay or transfer to a dissenting offeree if the dissenting offeree had elected to accept the take-over bid under subparagraph (4)(b)(i), and the cooperative must deposit the amounts in a separate account in a body corporate any of whose deposits are insured by the Canada Deposit Insurance Corporation or guaranteed by the Quebec Deposit Insurance Board or by any other similar entity created by the law of another province, and must place any thing received in lieu of money in the custody of such a body corporate.

(2) Subparagraph 175(9)(c)(ii) of the English version of the Act is replaced by the following:

(ii) the offeree cooperative or some designated person holds in trust for the dissenting shareholder the money or other things to which that shareholder is entitled as payment for or in exchange for the shares, and

196. Subsection 176(1) of the Act is replaced by the following:

Marginal note:Distributing cooperative

176. (1) If a shareholder holding shares of a distributing cooperative does not receive a notice under this Part, the shareholder may

(a) within ninety days after the date of the end of the take-over bid, or

(b) if the shareholder did not receive an offer pursuant to the take-over bid, within ninety days after the later of

(i) the date of the end of the take-over bid, and

(ii) the date on which the shareholder learned of the take-over bid,

require the offeror to acquire those shares.

197. Subsection 182(1) of the Act is replaced by the following:

Marginal note:Signatures

182. (1) A security certificate must be signed by at least one of the following persons, or a facsimile of the signature must be reproduced on the certificate:

(a) a director, or an individual on their behalf, or an officer;

(b) a transfer agent or branch transfer agent of the cooperative, or an individual on their behalf; or

(c) a trustee who certifies it in accordance with a trust indenture.

198. (1) Subsections 183(2) to (4) of the Act are replaced by the following:

Marginal note:Notation of restrictions

(2) No restriction, charge, agreement or endorsement described in subsection (3) is effective against a transferee of a security, issued by a cooperative or by a body corporate before it is continued under this Act, who has no actual knowledge of the restriction, charge, agreement or endorsement unless it or a reference to it is noted conspicuously on the security certificate.

Marginal note:Restrictions, etc.

(3) The restrictions, charges, agreements and endorsements referred to in subsection (2) are

(a) a restriction on transfer other than a constraint under section 130;

(b) a charge in favour of the cooperative;

(c) a unanimous agreement; and

(d) an endorsement under subsection 302(10).

Marginal note:Restrictions

(4) If the issued investment shares of a distributing cooperative remain outstanding and are held by more than one person, the cooperative must not restrict the transfer or ownership of its investment shares of any class or series except by way of a constraint under section 130.

(2) Paragraph 183(5)(b) of the Act is replaced by the following:

(b) to comply with any prescribed law.

199. The heading before section 247 of the French version of the Act is replaced by the following:

PRÉSENTATION DE RENSEIGNEMENTS D’ORDRE FINANCIER200. Subsection 249(2) of the Act is replaced by the following:

Marginal note:Examination

(2) The members and shareholders of a cooperative and their personal representatives may on request examine the statements referred to in subsection (1) during the usual business hours of the cooperative and may take extracts from them free of charge.

201. Subsection 252(1) of the Act is replaced by the following:

Marginal note:Copies to Director

252. (1) A distributing cooperative, any of the issued securities of which remain outstanding and are held by more than one person, must send a copy of the documents referred to in section 247 to the Director

(a) not less than twenty-one days before each annual meeting of members or, without delay after a resolution referred to in paragraph 251(c) is signed; and

(b) in any event within fifteen months after the last preceding annual meeting of shareholders was held or the resolution referred to in paragraph 251(c) was signed, but no later than six months after the end of the cooperative’s preceding financial year.

202. The portion of subsection 255(1) of the Act before paragraph (a) is replaced by the following:

Marginal note:Dispensing with auditor

255. (1) A cooperative that is not a distributing cooperative may resolve not to appoint an auditor by

203. Subsection 260(5) of the French version of the Act is replaced by the following:

(j) reduce or increase its stated capital, if its stated capital is set out in the articles;

206. Subsection 290(1) of the Act is replaced by the following:

Marginal note:Proposal to amend

290. (1) Subject to subsection (2), a person referred to in subsection 58(2) or (2.1) may make a proposal to amend the articles and section 58 applies, with any modifications that the circumstances require, to any meeting of the cooperative at which the proposal is to be considered.

207. Subsection 294(1) of the English version of the Act is replaced by the following:

Marginal note:Restated articles

294. (1) The directors may at any time, and must when reasonably so directed by the Director, restate the articles of incorporation.

208. (1) Subparagraph 298(1)(b)(ii) of the Act is replaced by the following:

(ii) except as may be prescribed, the articles of amalgamation be the same as the articles of the amalgamating holding cooperative, and

(2) Subparagraph 298(2)(b)(ii) of the Act is replaced by the following:

(ii) except as may be prescribed, the articles of amalgamation be the same as the articles of the amalgamating subsidiary cooperative whose shares are not cancelled, and

209. (1) Subsection 307(1) of the Act is replaced by the following:

Marginal note:Application of Part

307. (1) This Part, other than sections 308 and 311, does not apply to a cooperative that is an insolvent person or a bankrupt as those terms are defined in subsection 2(1) of the Bankruptcy and Insolvency Act.

(2) Subsection 307(2) of the English version of the Act is replaced by the following:

Marginal note:Staying of proceedings

(2) Any proceedings taken under this Part to dissolve or to liquidate and dissolve a cooperative are stayed if the cooperative is at any time found, in a proceeding under the Bankruptcy and Insolvency Act, to be an insolvent person as defined in that Act.

210. (1) The portion of subsection 308(6) of the Act before paragraph (b) is replaced by the following:

Marginal note:Rights preserved

(6) In the same manner and to the same extent as if it had not been dissolved, but subject to any reasonable terms that may be imposed by the Director, to the rights acquired by any person after its dissolution and to any changes to the internal affairs of the cooperative after its dissolution, the revived cooperative is

(a) restored to its previous position in law, including the restoration of any rights and privileges whether arising before its dissolution or after its dissolution and before its revival; and

(2) Subsection 308(7) of the Act is replaced by the following:

Marginal note:Legal actions

(7) Any legal action respecting the affairs of a revived cooperative taken between the time of its dissolution and its revival is valid and effective.

Definition of “interested person”

(8) In this section, “interested person” includes

(a) a member, a shareholder, a director, an officer, an employee and a creditor of the dissolved cooperative;

(b) a person who has a contractual relationship with the dissolved cooperative; and

(c) a trustee in bankruptcy for the dissolved cooperative.

211. (1) Paragraph 311(1)(d) of the Act is replaced by the following:

(d) does not have any directors or is in the situation described in subsection 85(6).

(2) Section 311 of the Act is amended by adding the following after subsection (3):

Marginal note:Exception — non-payment of incorporation fee

(3.1) Despite anything in this section, the Director may dissolve a cooperative by issuing a certificate of dissolution if the fee for the issuance of a certificate of incorporation is not paid.

212. Paragraph 312(1)(a) of the Act is replaced by the following:

(a) failed for two or more consecutive years to comply with the requirements of this Act with respect to the holding of annual meetings;

213. The portion of paragraph 313(1)(b) of the French version of the Act before subparagraph (i) is replaced by the following:

(2) A liquidator is not liable under this Part if the liquidator exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

(a) financial statements of the cooperative represented to the liquidator by an officer of the cooperative or in a written report of the auditor of the cooperative fairly to reflect the financial condition of the cooperative; or

(b) a report of a person whose profession lends credibility to a statement made by the professional person.

215. Subsection 326(1) of the Act is replaced by the following:

Marginal note:Heirs and representatives

326. (1) In this section, “member” and “shareholder” include their heirs and personal representatives.

216. Subsection 328(3) of the Act is repealed.

217. Paragraph 329(2)(d) of the French version of the Act is replaced by the following:

(b) a title to or an interest in capital, assets, property, profits, earnings or royalties;

(c) an option or other interest in, or a subscription to, a security;

(d) an agreement under which the interest of the purchaser is valued for purposes of conversion or surrender by reference to the value of a proportionate interest in a specified portfolio of assets;

(e) an agreement providing that money received will be repaid or treated as a subscription for shares, units or interests at the option of any person or the cooperative;

(f) a profit-sharing agreement or certificate;

(g) a lease, claim or royalty in oil, natural gas or mining, or an interest in the lease, claim or royalty;

(h) an income or annuity contract that is not issued by an insurance company governed by an Act of Parliament or a law of a province;

(i) an investment contract; and

(j) anything that is prescribed to be a financial interest.

“financial loss”

« perte financière »

“financial loss” means a financial loss arising out of an error, omission or misstatement in financial information concerning a cooperative that is required under this Act or the regulations.

“third party”

Marginal note:Version anglaise seulement

“third party” includes any subsequent party that is joined in proceedings before a court.

Marginal note:Application of Part

337.2 (1) This Part applies to the apportionment of damages awarded to a plaintiff for financial loss after a court has found more than one defendant or third party responsible for the financial loss.

Marginal note:Non-application of Part

(2) This Part does not apply to an award of damages to any of the following plaintiffs:

(a) Her Majesty in right of Canada or of a province;

(b) an agent of Her Majesty in right of Canada or of a province or a federal or provincial Crown corporation or government agency, unless a substantial part of its activities involves trading, including making investments in, securities or other financial instruments;

(c) a charitable organization, private foundation or public foundation within the meaning of subsection 149.1(1) of the Income Tax Act; or

(d) an unsecured creditor in respect of goods or services that the creditor provided to a cooperative.

Apportionment of Damages

Marginal note:Degree of responsibility

337.3 (1) Subject to this section and sections 337.4 to 337.6, every defendant or third party who has been found responsible for a financial loss is liable to the plaintiff only for the portion of the damages that corresponds to their degree of responsibility for the loss.

Marginal note:Uncollectable amounts

(2) If any part of the damages awarded against a responsible defendant or third party is uncollectable, the court may, on the application of the plaintiff, reallocate that amount to the other responsible defendants or third parties, if the application is made within one year after the date that the judgment was made enforceable.

Marginal note:Reallocation

(3) The amount that may be reallocated to each of the other responsible defendants or third parties under subsection (2) is calculated by multiplying the uncollectable amount by the percentage that corresponds to the degree of responsibility of that defendant or third party for the total financial loss.

Marginal note:Maximum amount

(4) The maximum amount determined under subsection (3), in respect of any responsible defendant or third party, may not be more than fifty per cent of the amount originally awarded against that responsible defendant or third party.

Marginal note:Exception — fraud

337.4 (1) The plaintiff may recover the whole amount of the damages awarded by the court from any defendant or third party who has been held responsible for a financial loss if it was established that the defendant or third party acted fraudulently or dishonestly.

Marginal note:Contribution

(2) The defendant or third party referred to in subsection (1) is entitled to claim contribution from any other defendant or third party who is held responsible for the loss.

Joint and Several, or Solidary, Liability

Marginal note:Individual or personal body corporate

337.5 (1) Defendants and third parties referred to in subsection 337.2(1) are jointly and severally, or solidarily, liable for the damages awarded to a plaintiff who is an individual or a personal body corporate and who

(a) had a financial interest in a cooperative on the day that an error, omission or misstatement in financial information concerning the cooperative occurred, or acquired a financial interest in the period between the day that the error, omission or misstatement occurred and the day, as determined by the court, that it was generally disclosed; and

(b) has established that the value of the plaintiff’s total financial interest in the cooperative was not more than the prescribed amount at the close of business on the day that the error, omission or misstatement occurred or at the close of business on any day that the plaintiff acquired a financial interest in the period referred to in paragraph (a).

Definition of “personal body corporate”

(2) In subsection (1), “personal body corporate” means a body corporate that is not actively engaged in any financial, commercial or industrial business and that is controlled by an individual or a group of individuals, each member of which is connected by blood relationship, adoption or marriage or by cohabiting with another member in a conjugal relationship.

Marginal note:Exception

(3) Subsection (1) does not apply when the plaintiff brings the action as a member of a partnership or other association or as a trustee in bankruptcy, liquidator or receiver of a body corporate.

Marginal note:Equitable grounds

337.6 (1) If the value of the plaintiff’s total financial interest referred to in subsection 337.5(1) is greater than the prescribed amount, a court may nevertheless determine that the defendants and third parties are jointly and severally, or solidarily, liable if the court considers that it is just and reasonable to do so.

Marginal note:Factors

(2) The Governor in Council may establish factors that the court shall take into account in deciding whether to hold the defendants and third parties jointly and severally, or solidarily, liable.

Marginal note:Statutory Instruments Act

(3) The Statutory Instruments Act does not apply to the factors referred to in subsection (2), but the factors shall be published in Part I of the Canada Gazette.

Marginal note:Value of security

337.7 (1) When, in order to establish the value of the total financial interest referred to in subsection 337.5(1), it is necessary to determine the value of a security that is traded on an organized market, the value of the security is, on the day specified in subsection (3),

(a) the closing price of that class of security;

(b) if no closing price is given, the average of the highest and lowest prices of that class of security; or

(c) if the security was not traded, the average of the bid and ask prices of that class of security.

Marginal note:Court may adjust value

(2) The court may adjust the value of a security that has been determined under subsection (1) when the court considers it reasonable to do so.

Marginal note:Valuation day

(3) The value of the security is to be determined as of the day that the error, omission or misstatement occurred. If the security was acquired in the period between that day and the day, as determined by the court, that the error, omission or misstatement was generally disclosed, the value is to be determined as of the day that it was acquired.

Definition of “organized market”

(4) In this section, “organized market” means a recognized exchange for a class of securities or a market that regularly publishes the price of that class of securities in a publication that is generally available to the public.

Marginal note:Court determines value

337.8 (1) The court shall determine the value of all or any part of a financial interest that is subject to resale restrictions or for which there is no organized market.

Marginal note:Factors

(2) The Governor in Council may establish factors that the court may take into account in determining value under subsection (1).

Marginal note:Statutory Instruments Act

(3) The Statutory Instruments Act does not apply to the factors referred to in subsection (2), but the factors shall be published in Part I of the Canada Gazette.

Marginal note:Application to determine value

337.9 The plaintiff may, by application made at any time before or during the course of the proceedings, request the court to determine the value of the plaintiff’s financial interest for the purpose of subsection 337.5(1).

219. The definition “complainant” in section 338 of the Act is amended by adding the word “or” at the end of paragraph (c) and by repealing paragraph (d).

220. Paragraph 339(2)(a) of the Act is replaced by the following:

(a) if the directors of the cooperative or its subsidiary do not bring, diligently prosecute, defend or discontinue the action, the complainant has given notice to the directors of the cooperative or its subsidiary of the complainant’s intention to apply to the court under subsection (1) not less than fourteen days before bringing the application, or as otherwise ordered by the court;

221. The portion of subsection 340(2) of the French version of the Act before paragraph (a) is replaced by the following:

222. Paragraphs 345(c) and (d) of the Act are replaced by the following:

(c) to grant, or to refuse to grant, an exemption that may be granted under this Act and the regulations;

(d) to refuse to issue a certificate of discontinuance or a certificate attesting that as of a certain date the cooperative exists under section 375;

(d.1) to correct, or to refuse to correct, articles, a notice, a certificate or other document under section 376.1;

(d.2) to cancel, or to refuse to cancel, the articles and related certificate under section 376.2;

223. The Act is amended by adding the following after section 361:

PART 21.1 DOCUMENTS IN ELECTRONIC OR OTHER FORM

Marginal note:Definitions

361.1 The definitions in this section apply in this Part.

“electronic document”

« document électronique »

“electronic document” means, except in section 361.6, any form of representation of information or of concepts fixed in any medium in or by electronic, optical or other similar means and that can be read or perceived by a person or by any means.

“information system”

« système d’information »

“information system” means a system used to generate, send, receive, store or otherwise process an electronic document.

Marginal note:Application

361.2 This Part does not apply to a notice, document or other information sent to or issued by the Director pursuant to this Act or to any prescribed notice, document or other information.

Marginal note:Use not mandatory

361.3 (1) Nothing in this Act or the regulations requires a person to create or provide an electronic document.

Marginal note:Consent and other requirements

(2) Despite anything in this Part, a requirement under this Act or the regulations to provide a person with a notice, document or other information is not satisfied by the provision of an electronic document unless

(a) the addressee has consented, in the manner prescribed, and has designated an information system for the receipt of the electronic document; and

(3) An addressee may revoke the consent referred to in paragraph (2)(a) in the manner prescribed.

Marginal note:Creation and provision of information

361.4 A requirement under this Act or the regulations that a notice, document or other information be created or provided is satisfied by the creation or provision of an electronic document if

(a) the by-laws or the articles of the cooperative do not provide otherwise; and

(b) the regulations, if any, have been complied with.

Marginal note:Creation of information in writing

361.5 (1) A requirement under this Act or the regulations that a notice, document or other information be created in writing is satisfied by the creation of an electronic document if, in addition to the conditions in section 361.4,

(a) the information in the electronic document is accessible so as to be usable for subsequent reference; and

(b) the regulations pertaining to this subsection, if any, have been complied with.

Marginal note:Provision of information in writing

(2) A requirement under this Act or the regulations that a notice, document or other information be provided in writing is satisfied by the provision of an electronic document if, in addition to the conditions set out in section 361.4,

(a) the information in the electronic document is accessible by the addressee and capable of being retained by the addressee, so as to be usable for subsequent reference; and

(b) the regulations pertaining to this subsection, if any, have been complied with.

Marginal note:Copies

(3) A requirement under this Act or the regulations for one or more copies of a document to be provided to a single addressee at the same time is satisfied by the provision of a single version of the electronic document.

Marginal note:Registered mail

(4) A requirement under this Act or the regulations to provide a document by registered mail is not satisfied by the sending of an electronic document unless prescribed.

Marginal note:Statutory declarations and affidavits

361.6 (1) A statutory declaration or an affidavit required under this Act or the regulations may be created or provided in an electronic document if

(a) the person who makes the statutory declaration or affidavit signs it with his or her secure electronic signature;

(b) the authorized person before whom the statutory declaration or affidavit is made signs it with his or her secure electronic signature; and

(c) the requirements of sections 361.3 to 361.5 are complied with.

Marginal note:Definitions

(2) For the purposes of this section, “electronic document” and “secure electronic signature” have the same meaning as in subsection 31(1) of the Personal Information Protection and Electronic Documents Act.

Marginal note:Clarification

(3) For the purpose of complying with paragraph (1)(c), the references to an “electronic document” in sections 361.3 to 361.5 are to be read as references to an “electronic document” as defined in subsection 31(1) of the Personal Information Protection and Electronic Documents Act.

Marginal note:Signatures

361.7 A requirement under this Act or the regulations for a signature or for a document to be executed, except with respect to a statutory declaration or an affidavit, is satisfied if, in relation to an electronic document, the prescribed requirements pertaining to this section, if any, are met and if the signature results from the application by a person of a technology or a process that permits the following to be proven:

(a) the signature resulting from the use by a person of the technology or process is unique to the person;

(b) the technology or process is used by a person to incorporate, attach or associate the person’s signature to the electronic document; and

(c) the technology or process can be used to identify the person using the technology or process.

224. Subsection 362(4) of the French version of the Act is replaced by the following:

364. When a notice or document is required by this Act or the regulations to be sent, the sending of the notice or document may be waived or the time for the notice or document may be waived or abridged at any time with the consent in writing of the person who is entitled to it.

226. Section 367 of the Act is amended by adding the following after subsection (2):

Marginal note:Authority to sign notices

(3) The notices referred to in subsections 30(2) and (4), 81(1) and 91(1), and the annual return referred to in subsection 374(1), may be signed by any individual who has the relevant knowledge of the cooperative and who is authorized to do so by the directors, or, in the case of the notice referred to in subsection 81(1), the incorporators.

Marginal note:Execution of documents

(4) Any articles, notice, resolution, requisition, statement or other document required or permitted to be executed or signed by more than one individual for the purposes of this Act may be executed or signed in several documents of like form, each of which is executed or signed by one or more of the individuals. The documents, when duly executed or signed by all individuals required or permitted, as the case may be, to do so, shall be deemed to constitute one document for the purposes of this Act.

227. (1) Section 372 of the Act is renumbered as subsection 372(1).

(2) Paragraph 372(1)(d) of the Act is replaced by the following:

(d) respecting the payment of any fees, including the time when and the manner in which the fees are to be paid, the additional fees that may be charged for the late payment of fees and the circumstances in which any fees previously paid may be refunded in whole or in part;

(d.1) prescribing, for the purposes of subsection 58(2.1), a manner of determining the number of investment shares required for a person to be eligible to make a proposal, including the time and manner of determining a value or percentage of the outstanding investment shares;

(d.2) prescribing, for the purposes of paragraph 58(4)(d), the minimum amount of support required in relation to the number of times the person has submitted substantially the same proposal within the prescribed period;

(3) Subsection 372(1) of the Act is amended by striking out the word “and” at the end of paragraph (e) and by adding the following after paragraph (f):

(g) prescribing any matter necessary for the purposes of the application of Part 21.1, including the time and circumstances when an electronic document is to be considered to have been provided or received and the place where it is considered to have been provided or received;

(h) prescribing the manner of, and conditions for, participating in a meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting; and

(i) prescribing, for the purposes of subsection 65(3), the manner of, and conditions for, voting at a meeting of a cooperative by means of a telephonic, electronic or other communication facility.

(4) Section 372 of the Act is amended by adding the following after subsection (1):

Marginal note:Incorporation by reference

(2) The regulations may incorporate any material by reference, regardless of its source and either as it exists on a particular date or as amended from time to time.

Marginal note:Incorporated material is not a regulation

(3) Material does not become a regulation for the purposes of the Statutory Instruments Act because it is incorporated by reference.

228. The Act is amended by adding the following after section 372:

Marginal note:Fee to be paid before service performed

372.1 The fee in respect of the filing, examination, or copying of any document or in respect of any action that the Director is required or authorized to take must be paid to the Director on the filing, examination, or copying or before the Director takes the action in respect of which the fee is payable.

229. (1) The portion of paragraph 373(2)(b) of the Act before subparagraph (i) is replaced by the following:

(b) on receiving the articles or statement in the form that the Director has fixed, any other required documents and the required fees, the Director must

(2) Subparagraph 373(2)(b)(iv) of the Act is replaced by the following:

(iv) send the certificate, or a copy, image or photographic, electronic or other reproduction of it, to the cooperative or its agent, and

230. Sections 375 and 376 of the Act are replaced by the following:

Marginal note:Certificate

375. (1) The Director may provide any person with a certificate that a cooperative

(a) has sent to the Director a document required to be sent;

(b) has paid all required fees; or

(c) exists as of a certain date.

Marginal note:Director may refuse to issue certificate of existence

(2) For greater certainty, the Director may refuse to issue a certificate under paragraph (1)(c) if the Director has knowledge that the cooperative is in default of sending a document required to be sent or is in default of paying a required fee.

Marginal note:Alteration

376. The Director may alter a notice or document, other than an affidavit or statutory declaration, if authorized to do so by the person who sent the document or by their representative.

Marginal note:Corrections at request of Director

376.1 (1) If there is an error in articles, a notice, a certificate or other document, the directors, members or shareholders must, on the request of the Director, pass the resolutions and send to the Director the documents required to comply with this Act, and take any other steps that the Director may reasonably require so that the Director may correct the document.

Marginal note:No prejudice

(2) Before proceeding under subsection (1), the Director must be satisfied that the correction would not prejudice any of the members, shareholders or creditors of the cooperative.

Marginal note:Corrections at the request of the cooperative

(3) The Director may, at the request of the cooperative or of any other interested person, accept a correction to any of the documents referred to in subsection (1) if

(a) the correction is approved by the directors of the cooperative, unless the error is obvious or was made by the Director; and

(b) the Director is satisfied that the correction would not prejudice any of the members, shareholders or creditors of the cooperative and that the correction reflects the original intention of the cooperative or the incorporators, as the case may be.

Marginal note:Application to court

(4) If, in the view of the Director, of the cooperative or of any interested person who wishes a correction, a correction to any of the documents referred to in subsection (1) would prejudice any of the members, shareholders or creditors of a cooperative, the Director, the cooperative or the person, as the case may be, may apply to the court for an order that the document be corrected and for an order determining the rights of the members, shareholders or creditors.

Marginal note:Notice to Director

(5) An applicant under subsection (4) must give the Director notice of the application, and the Director is entitled to appear and to be heard in person or by counsel.

Marginal note:Director may require surrender of document

(6) The Director may demand the surrender of the original document, and may issue a corrected certificate or file the corrected articles, notice or other document.

Marginal note:Date of corrected document

(7) A corrected document must bear the date of the document it replaces unless

(a) the correction is made with respect to the date of the document, in which case the document must bear the corrected date; or

(b) the court decides otherwise.

Marginal note:Notice

(8) If a corrected certificate materially amends the terms of the original certificate, the Director must without delay give notice of the correction in a publication generally available to the public.

Marginal note:Cancellation of articles by Director

376.2 (1) In the prescribed circumstances, the Director may cancel the articles and related certificate of a cooperative.

Marginal note:No prejudice

(2) Before proceeding under subsection (1), the Director must be satisfied that the cancellation would not prejudice any of the members, shareholders or creditors of the cooperative.

Marginal note:Request to Director to cancel articles

(3) In the prescribed circumstances, the Director may, at the request of a cooperative or of any other interested person, cancel the articles and related certificate of the cooperative if

(a) the cancellation is approved by the directors of the cooperative; and

(b) the Director is satisfied that the cancellation would not prejudice any of the members, shareholders or creditors of the cooperative and that the cancellation reflects the original intention of the cooperative or the incorporators, as the case may be.

Marginal note:Application to court

(4) If, in the view of the Director, of the cooperative or of any interested person who wishes a cancellation, a cancellation of articles and a related certificate would prejudice any of the members, shareholders or creditors of a cooperative, the Director, the cooperative or the person, as the case may be, may apply to the court for an order that the articles and certificate be cancelled and for an order determining the rights of the members, shareholders or creditors.

Marginal note:Notice to Director

(5) An applicant under subsection (4) must give the Director notice of the application, and the Director is entitled to appear and to be heard in person or by counsel.

Marginal note:Return of certificate

(6) The Director may demand the surrender of a cancelled certificate.

231. Subsection 377(1) of the Act is replaced by the following:

Marginal note:Inspection

377. (1) A person who has paid the required fee is entitled during usual business hours to examine a document required by this Act or the regulations to be sent to the Director, except a report sent under subsection 330(2), and to make copies of it or take extracts from it.

232. Subsection 378(3) of the Act is replaced by the following:

Marginal note:Retention of records

(3) The Director is not required to produce any document, other than a certificate and attached articles or statement filed under section 373, after the expiration of the prescribed period.

TRANSITIONAL PROVISIONS

233. Part XIX.1 of the Canada Business Corporations Act, as enacted by section 115 of this Act, does not apply to any proceeding commenced before the coming into force of that section.

234. Part 18.1 of the Canada Cooperatives Act, as enacted by section 218 of this Act, does not apply to any proceeding commenced before the coming into force of that section.

CONSEQUENTIAL AMENDMENTS

1997, c. 26Budget Implementation Act, 1997

235. Paragraph 8(2)(n) of the Budget Implementation Act, 1997 is replaced by the following:

(n) subsections 124(1) to (6) (indemnification of directors and insurance for director’s liability);

R.S., c. C-10Canada Post Corporation Act

Marginal note:1993, c. 17, s. 1

236. Section 27 of the Canada Post Corporation Act is replaced by the following:

Marginal note:Canada Business Corporations Act

27. (1) The definitions “beneficial ownership”, “debt obligation”, “redeemable share”, “security”, “security interest” and “special resolution” in subsection 2(1) and sections 23 to 26, 34, 36 to 38 (except subsection 38(6)), 42, 43, 50, 172 and 257 of the Canada Business Corporations Act apply, with such modifications as the circumstances require, in respect of the Corporation as if the references therein to articles were references to the by-laws of the Corporation.

Marginal note:Assets of Corporation

(2) For the purposes of applying subsections 34(2), 36(2) and 38(3) and section 42 of the Canada Business Corporations Act in respect of the Corporation, the assets held by the Corporation as an agent of Her Majesty in right of Canada shall be deemed to be assets of the Corporation.

COMING INTO FORCE

Marginal note:Coming into force

237. The provisions of this Act come into force on a day or days to be fixed by order of the Governor in Council.

SCHEDULE(Section 135)TECHNICAL AMENDMENTS TO THE ENGLISH VERSION OF THE CANADA BUSINESS CORPORATIONS ACT

1. Paragraph (c) of the definition “resident Canadian” in subsection 2(1) is replaced by the following:

(c) a permanent resident within the meaning of the Immigration Act and ordinarily resident in Canada, except a permanent resident who has been ordinarily resident in Canada for more than one year after the time at which they first became eligible to apply for Canadian citizenship;

2. Subsection 21(4) is replaced by the following:

Marginal note:Supplemental lists

(4) A person requiring a corporation to furnish a basic list may, by stating in the affidavit referred to in subsection (3) that they require supplemental lists, require the corporation or its agent on payment of a reasonable fee to furnish supplemental lists setting out any changes from the basic list in the names or addresses of the shareholders and the number of shares owned by each shareholder for each business day following the date the basic list is made up to.

3. Section 41 is replaced by the following:

Marginal note:Commission for sale of shares

41. The directors may authorize the corporation to pay a reasonable commission to any person in consideration of the person’s purchasing or agreeing to purchase shares of the corporation from the corporation or from any other person, or procuring or agreeing to procure purchasers for any such shares.

4. Subsection 46(3) is replaced by the following:

Marginal note:Effect of sale

(3) Where shares are sold by a corporation under subsection (1), the owner of the shares immediately prior to the sale shall by that sale be divested of their interest in the shares, and the person who, but for the sale, would be the registered owner of the shares or a person who satisfies the corporation that, but for the sale, they could properly be treated as the registered owner or registered holder of the shares under section 51 shall, from the time of the sale, be entitled to receive only the net proceeds of the sale, together with any income earned thereon from the beginning of the month next following the date of the receipt by the corporation of the proceeds of the sale, less any taxes thereon and any costs of administration of a trust fund constituted under subsection 47(1) in relation thereto.

5. (1) The definitions “bona fide purchaser”, “broker” and “holder” in subsection 48(2) are replaced by the following:

“bona fide purchaser”

« acheteur de bonne foi »

“bona fide purchaser” means a purchaser for value in good faith and without notice of any adverse claim who takes delivery of a security in bearer form or order form or of a security in registered form issued or endorsed to the purchaser or endorsed in blank;

“broker”

« courtier »

“broker” means a person who is engaged, whether or not exclusively, in the business of buying and selling securities and who, in the transaction concerned, acts for, or buys a security from, or sells a security to a customer;

“holder”

« détenteur »

“holder” means a person in possession of a security issued or endorsed to the person or the bearer or in blank;

(2) Subsection 48(5) is replaced by the following:

Marginal note:Order form

(5) A debt obligation is in order form where, by its terms, it is payable to the order or assigns of any person therein specified with reasonable certainty or to that person’s order.

(3) Subsection 48(7) is replaced by the following:

Marginal note:Guarantor for issuer

(7) A guarantor for an issuer is deemed to be an issuer to the extent of the guarantee whether or not the obligation is noted on the security.

6. (1) Subsection 49(1) is replaced by the following:

Marginal note:Rights of holder

49. (1) Every security holder is entitled at their option to a security certificate that complies with this Act or a non-transferable written acknowledgment of their right to obtain such a security certificate from a corporation in respect of the securities of that corporation held by them.

(2) Subsection 49(6) is replaced by the following:

Marginal note:Continuation of signature

(6) If a security certificate contains a printed or mechanically reproduced signature of a person, the corporation may issue the security certificate, notwithstanding that the person has ceased to be a director or an officer of the corporation, and the security certificate is as valid as if the person were a director or an officer at the date of its issue.

7. (1) The portion of subsection 51(2) before paragraph (a) is replaced by the following:

Marginal note:Constructive registered holder

(2) Notwithstanding subsection (1), a corporation whose articles restrict the right to transfer its securities shall, and any other corporation may, treat a person as a registered security holder entitled to exercise all the rights of the security holder that the person represents, if the person furnishes the corporation with evidence as described in subsection 77(4) that the person is

(2) Subsection 51(3) is replaced by the following:

Marginal note:Permissible registered holder

(3) If a person on whom the ownership of a security devolves by operation of law, other than a person described in subsection (2), furnishes proof of the person’s authority to exercise rights or privileges in respect of a security of the corporation that is not registered in the person’s name, the corporation shall treat the person as entitled to exercise those rights or privileges.

(3) The portion of subsection 51(7) before paragraph (a) is replaced by the following:

Marginal note:Transmission of securities

(7) Subject to any applicable law relating to the collection of taxes, a person referred to in paragraph (2)(a) is entitled to become a registered holder, or to designate a registered holder, if the person deposits with the corporation or its transfer agent

8. Paragraph 52(1)(a) is replaced by the following:

(a) if a valid security, similar in all respects to the security involved in the overissue, is reasonably available for purchase, the person entitled to the validation or issue may compel the issuer to purchase and deliver such a security against surrender of the security that the person holds;

9. Paragraph 53(d) is replaced by the following:

(d) if the defendant establishes that a defence or defect exists, the plaintiff has the burden of establishing that the defence or defect is ineffective against the plaintiff or some person under whom the plaintiff claims.

10. Section 54 is replaced by the following:

Marginal note:Securities fungible

54. Unless otherwise agreed, and subject to any applicable law, regulation or stock exchange rule, a person required to deliver securities may deliver any security of the specified issue in bearer form or registered in the name of the transferee or endorsed to the transferee or in blank.

11. Paragraphs 56(a) and (b) are replaced by the following:

(a) if the event requires the payment of money or the delivery of securities, or both, on presentation or surrender of the security, and such money or securities are available on the date set for payment or exchange, and the purchaser takes the security more than one year after that date; or

(b) if the purchaser takes the security more than two years after the date set for presentation or surrender or the date on which such performance became due.

12. Paragraph 57(b) is replaced by the following:

(b) an employee of the issuer or of a person referred to in paragraph (a) who in the ordinary course of their duties handles the security.

13. Paragraph 58(1)(a) is replaced by the following:

(a) any person may complete it by filling in the blanks in accordance with their authority; and

14. Paragraphs 59(1)(b) and (c) are replaced by the following:

(b) the person’s acts in connection with the issue of the security are within their authority; and

(c) the person has reasonable grounds for believing that the security is in the form and within the amount the issuer is authorized to issue.

15. Subsection 60(1) is replaced by the following:

Marginal note:Title of purchaser

60. (1) On delivery of a security the purchaser acquires the rights in the security that the transferor had or had authority to convey, except that a purchaser who has been a party to any fraud or illegality affecting the security or who as a prior holder had notice of an adverse claim does not improve their position by taking from a later bona fide purchaser.

16. Subsection 61(2) is replaced by the following:

Marginal note:Notice of fiduciary duty

(2) Notwithstanding that a purchaser, or any broker for a seller or purchaser, has notice that a security is held for a third person or is registered in the name of or endorsed by a fiduciary, they have no duty to inquire into the rightfulness of the transfer and have no notice of an adverse claim, except that where they know that the consideration is to be used for, or that the transaction is for, the personal benefit of the fiduciary or is otherwise in breach of the fiduciary’s duty, the purchaser or broker is deemed to have notice of an adverse claim.

17. (1) Subsection 63(1) is replaced by the following:

Marginal note:Warranties to issuer

63. (1) A person who presents a security for registration of transfer or for payment or exchange warrants to the issuer that the person is entitled to the registration, payment or exchange, except that a purchaser for value without notice of an adverse claim who receives a new, reissued or re-registered security on registration of transfer warrants only that the purchaser has no knowledge of any unauthorized signature in a necessary endorsement.

(2) Paragraph 63(2)(c) is replaced by the following:

(c) the person knows of nothing that might impair the validity of the security.

(3) Subsection 63(3) is replaced by the following:

Marginal note:Warranties of intermediary

(3) Where a security is delivered by an intermediary known by the purchaser to be entrusted with delivery of the security on behalf of another or with collection of a draft or other claim to be collected against such delivery, the intermediary by such delivery warrants only the intermediary’s good faith and authority even if the intermediary has purchased or made advances against the draft or other claim to be collected against the delivery.

(4) Subsection 63(5) is replaced by the following:

Marginal note:Warranties of broker

(5) A broker gives to a customer, to the issuer and to a purchaser, as the case may be, the warranties provided in this section and has the rights and privileges of a purchaser under this section, and those warranties of and in favour of the broker acting as an agent are in addition to warranties given by the customer and warranties given in favour of the customer.

18. Section 64 is replaced by the following:

Marginal note:Right to compel endorsement

64. When a security in registered form is delivered to a purchaser without a necessary endorsement, the purchaser may become a bona fide purchaser only as of the time the endorsement is supplied, but against the transferor the transfer is complete on delivery and the purchaser has a specifically enforceable right to have any necessary endorsement supplied.

19. (1) Paragraph 65(1)(b) is replaced by the following:

(b) if a person described in paragraph (a) is described as a fiduciary but is no longer serving in the described capacity, either that person or the person’s successor;

(2) Paragraph 65(1)(g) is replaced by the following:

(g) to the extent that a person described in paragraphs (a) to (f) may act through an agent, the authorized agent.

(3) Subsection 65(8) is replaced by the following:

Marginal note:Immunity of endorser

(8) Unless otherwise agreed, the endorser assumes no obligation that the security will be honoured by the issuer.

(4) Subsection 65(10) is replaced by the following:

Marginal note:Failure of fiduciary to comply

(10) Failure of a fiduciary to comply with a controlling instrument or with the law of the jurisdiction governing the fiduciary relationship, including any law requiring the fiduciary to obtain court approval of a transfer, does not render the fiduciary’s endorsement unauthorized for the purposes of this Part.

20. (1) Paragraph 70(1)(a) is replaced by the following:

(a) the purchaser or a person designated by the purchaser acquires possession of a security;

(2) Paragraphs 70(1)(c) and (d) are replaced by the following:

(c) the broker of the purchaser sends the purchaser confirmation of the purchase and identifies in a record a specific security as belonging to the purchaser; or

(d) with respect to an identified security to be delivered while still in the possession of a third person, that person acknowledges holding it for the purchaser.

(3) Subsection 70(2) is replaced by the following:

Marginal note:Constructive ownership

(2) A purchaser is the owner of a security that a broker holds for the purchaser, but is not a holder except in the cases referred to in paragraphs (1)(b) and (c).

21. (1) Paragraphs 71(1)(a) and (b) are replaced by the following:

(a) the selling customer fulfils their duty to deliver by delivering the security to the selling broker or to a person designated by the selling broker or by causing an acknowledgment to be made to the selling broker that it is held for the selling broker; and

(b) the selling broker, including a correspondent broker, acting for a selling customer fulfils their duty to deliver by delivering the security or a like security to the buying broker or to a person designated by the buying broker or by effecting clearance of the sale in accordance with the rules of the exchange on which the transaction took place.

(2) Subsections 71(2) and (3) are replaced by the following:

Marginal note:Duty to deliver

(2) Subject to this section and unless otherwise agreed, a transferor’s duty to deliver a security under a contract of purchase is not fulfilled until the transferor delivers the security in negotiable form to the purchaser or to a person designated by the purchaser, or causes an acknowledgment to be made to the purchaser that the security is held for the purchaser.

Marginal note:Delivery to broker

(3) A sale to a broker purchasing for the broker’s own account is subject to subsection (2) and not subsection (1), unless the sale is made on a stock exchange.

22. Subsection 72(1) is replaced by the following:

Marginal note:Right to reclaim possession

72. (1) A person against whom the transfer of a security is wrongful for any reason, including incapacity, may against anyone except a bona fide purchaser reclaim possession of the security or obtain possession of any new security evidencing all or part of the same rights or claim damages.

23. Subsection 73(1) is replaced by the following:

Marginal note:Right to requisites for registration

73. (1) Unless otherwise agreed, a transferor shall on demand supply a purchaser with proof of authority to transfer or with any other requisite that is necessary to obtain registration of the transfer of a security, but if the transfer is not for value a transferor need not do so unless the purchaser pays the reasonable and necessary costs of the proof and transfer.

24. Section 75 is replaced by the following:

Marginal note:No conversion if good faith delivery by agent

75. An agent or bailee who in good faith, including observance of reasonable commercial standards if the agent or bailee is in the business of buying, selling or otherwise dealing with securities of a corporation, has received securities and sold, pledged or delivered them according to the instructions of their principal is not liable for conversion or for participation in breach of fiduciary duty although the principal has no right to dispose of them.

25. (1) The portion of subsection 78(2) before paragraph (a) is replaced by the following:

Marginal note:Discharge of duty

(2) An issuer may discharge a duty of inquiry by any reasonable means, including notifying an adverse claimant by registered mail sent to the address furnished by the claimant or, if no such address has been furnished, to the claimant’s residence or regular place of business, that a security has been presented for registration of transfer by a named person, and that the transfer will be registered unless within thirty days from the date of mailing the notice either

(2) Paragraph 78(3)(c) is replaced by the following:

(c) an issuer is deemed not to have notice of the contents of any court record or any registered document even if the record or document is in the issuer’s possession and even if the transfer is made on the endorsement of a fiduciary to the fiduciary or the fiduciary’s nominee.

26. (1) Subsection 80(1) is replaced by the following:

Marginal note:Notice of lost or stolen security

80. (1) Where a security has been lost, apparently destroyed or wrongfully taken, and the owner fails to notify the issuer of that fact by giving the issuer written notice of an adverse claim within a reasonable time after discovering the loss, destruction or taking and if the issuer has registered a transfer of the security before receiving such notice, the owner is precluded from asserting against the issuer any claim to a new security.

(2) Subsection 80(4) is replaced by the following:

Marginal note:Right of issuer to recover

(4) In addition to any rights on an indemnity bond, the issuer may recover a new security issued under subsection (2) from the person to whom it was issued or anyone taking under the person other than a bona fide purchaser.

27. (1) Subsection 83(1) is replaced by the following:

Marginal note:Conflict of interest

83. (1) No person shall be appointed as trustee if there is a material conflict of interest between their role as trustee and their role in any other capacity.

(2) The portion of subsection 83(2) before paragraph (a) is replaced by the following:

Marginal note:Eliminating conflict of interest

(2) A trustee shall, within ninety days after becoming aware that a material conflict of interest exists

28. Paragraphs 88(a) to (c) are replaced by the following:

(a) declaring that they have read and understand the conditions of the trust indenture described in section 86;

(b) describing the nature and scope of the examination or investigation on which the certificate, statement or opinion is based; and

(c) declaring that they have made the examination or investigation that they believe necessary to enable them to make their statements or give their opinions.

29. The portion of section 91 before paragraph (a) is replaced by the following:

Marginal note:Duty of care

91. A trustee in exercising their powers and discharging their duties shall

30. Sections 92 and 93 are replaced by the following:

Marginal note:Reliance on statements

92. Notwithstanding section 91, a trustee is not liable if they rely in good faith on statements contained in a statutory declaration, certificate, opinion or report that complies with this Act or the trust indenture.

Marginal note:No exculpation

93. No term of a trust indenture or of any agreement between a trustee and the holders of debt obligations issued thereunder or between the trustee and the issuer or guarantor shall operate so as to relieve a trustee from the duties imposed on the trustee by section 91.

31. Sections 94 and 95 are replaced by the following:

Marginal note:Functions of receiver

94. A receiver of any property of a corporation may, subject to the rights of secured creditors, receive the income from the property and pay the liabilities connected with the property and realize the security interest of those on behalf of whom the receiver is appointed, but, except to the extent permitted by a court, the receiver may not carry on the business of the corporation.

Marginal note:Functions of receiver-manager

95. A receiver of a corporation who is also appointed receiver-manager of the corporation may carry on any business of the corporation to protect the security interest of those on behalf of whom the receiver is appointed.

32. Paragraph 99(b) is replaced by the following:

(b) deal with any property of the corporation in their possession or control in a commercially reasonable manner.

33. (1) Paragraph 100(a) is replaced by the following:

(a) an order appointing, replacing or discharging a receiver or receiver-manager and approving their accounts;

(2) Paragraph 100(d) is replaced by the following:

(d) an order requiring the receiver or receiver-manager, or a person by or on behalf of whom the receiver or receiver-manager is appointed, to make good any default in connection with the receiver’s or receiver-manager’s custody or management of the property and business of the corporation, or to relieve any such person from any default on such terms as the court thinks fit, and to confirm any act of the receiver or receiver-manager; and

34. Section 101 is replaced by the following:

Marginal note:Duties of receiver and receiver-manager

101. A receiver or receiver-manager shall

(a) immediately notify the Director of their appointment and discharge;

(b) take into their custody and control the property of the corporation in accordance with the court order or instrument under which they are appointed;

(c) open and maintain a bank account in their name as receiver or receiver-manager of the corporation for the moneys of the corporation coming under their control;

(d) keep detailed accounts of all transactions carried out as receiver or receiver-manager;

(e) keep accounts of their administration that shall be available during usual business hours for inspection by the directors of the corporation;

(f) prepare at least once in every six month period after the date of their appointment financial statements of their administration as far as is practicable in the form required by section 155; and

(g) on completion of their duties, render a final account of their administration in the form adopted for interim accounts under paragraph (f).

35. Subsection 106(5) is replaced by the following:

Marginal note:No stated terms

(5) A director not elected for an expressly stated term ceases to hold office at the close of the first annual meeting of shareholders following the director’s election.

36. (1) Paragraph 107(b) is replaced by the following:

(b) each shareholder entitled to vote at an election of directors has the right to cast a number of votes equal to the number of votes attached to the shares held by the shareholder multiplied by the number of directors to be elected, and may cast all of those votes in favour of one candidate or distribute them among the candidates in any manner;

(2) Paragraph 107(d) is replaced by the following:

(d) if a shareholder has voted for more than one candidate without specifying the distribution of votes, the shareholder is deemed to have distributed the votes equally among those candidates;

(3) Paragraph 107(f) is replaced by the following:

(f) each director ceases to hold office at the close of the first annual meeting of shareholders following the director’s election;

37. Subsection 108(1) is replaced by the following:

Marginal note:Ceasing to hold office

108. (1) A director of a corporation ceases to hold office when the director

(a) dies or resigns;

(b) is removed in accordance with section 109; or

(c) becomes disqualified under subsection 105(1).

38. The portion of subsection 110(2) after paragraph (a) is replaced by the following:

(b) receives a notice or otherwise learns of a meeting of shareholders called for the purpose of removing the director from office, or

(c) receives a notice or otherwise learns of a meeting of directors or shareholders at which another person is to be appointed or elected to fill the office of director, whether because of the director’s resignation or removal or because the director’s term of office has expired or is about to expire,

is entitled to submit to the corporation a written statement giving reasons for resigning or for opposing any proposed action or resolution.

39. Subsection 111(5) is replaced by the following:

Marginal note:Unexpired term

(5) A director appointed or elected to fill a vacancy holds office for the unexpired term of their predecessor.

40. Section 116 is replaced by the following:

Marginal note:Validity of acts of directors and officers

116. An act of a director or officer is valid notwithstanding an irregularity in their election or appointment or a defect in their qualification.

41. Subsection 118(6) is replaced by the following:

Marginal note:No liability

(6) A director who proves that the director did not know and could not reasonably have known that the share was issued for a consideration less than the fair equivalent of the money that the corporation would have received if the share had been issued for money is not liable under subsection (1).

42. (1) Subsection 119(3) is replaced by the following:

Marginal note:Limitation

(3) A director, unless sued for a debt referred to in subsection (1) while a director or within two years after ceasing to be a director, is not liable under this section.

(2) Subsection 119(5) is replaced by the following:

Marginal note:Subrogation of director

(5) Where a director pays a debt referred to in subsection (1) that is proved in liquidation and dissolution or bankruptcy proceedings, the director is entitled to any preference that the employee would have been entitled to, and where a judgment has been obtained, the director is entitled to an assignment of the judgment.

43. (1) The portion of subsection 122(1) before paragraph (a) is replaced by the following:

Marginal note:Duty of care of directors and officers

122. (1) Every director and officer of a corporation in exercising their powers and discharging their duties shall

(2) Subsection 122(3) is replaced by the following:

Marginal note:No exculpation

(3) Subject to subsection 146(5), no provision in a contract, the articles, the by-laws or a resolution relieves a director or officer from the duty to act in accordance with this Act or the regulations or relieves them from liability for a breach thereof.

44. (1) Subsection 123(1) is replaced by the following:

123. (1) A director who is present at a meeting of directors or committee of directors is deemed to have consented to any resolution passed or action taken at the meeting unless

(a) the director requests a dissent to be entered in the minutes of the meeting, or the dissent has been entered in the minutes;

(b) the director sends a written dissent to the secretary of the meeting before the meeting is adjourned; or

(c) the director sends a dissent by registered mail or delivers it to the registered office of the corporation immediately after the meeting is adjourned.

(2) Subsection 123(3) is replaced by the following:

Marginal note:Dissent of absent director

(3) A director who was not present at a meeting at which a resolution was passed or action taken is deemed to have consented thereto unless within seven days after becoming aware of the resolution, the director aware or the resolution, the director

(a) causes a dissent to be placed with the minutes of the meeting; or

(b) sends a dissent by registered mail or delivers it to the registered office of the corporation.

45. Paragraph 126(2)(c) is replaced by the following:

(c) a person is deemed to beneficially own shares that are beneficially owned by a body corporate controlled directly or indirectly by the person;

46. Section 136 is replaced by the following:

Marginal note:Waiver of notice

136. A shareholder or any other person entitled to attend a meeting of shareholders may in any manner waive notice of a meeting of shareholders, and their attendance at a meeting of shareholders is a waiver of notice of the meeting, except where they attend a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

47. Subsection 140(3) is replaced by the following:

Marginal note:Powers of representative

(3) An individual authorized under subsection (2) may exercise on behalf of the body corporate or association all the powers it could exercise if it were an individual shareholder.

48. The definition “proxy” in section 147 is replaced by the following:

“proxy”

« procuration »

“proxy” means a completed and executed form of proxy by means of which a shareholder appoints a proxyholder to attend and act on the shareholder’s behalf at a meeting of shareholders;

49. (1) Subsection 148(2) is replaced by the following:

Marginal note:Execution of proxy

(2) A proxy shall be executed by the shareholder or by the shareholder’s attorney authorized in writing.

(2) The portion of paragraph 148(4)(a) before subparagraph (i) is replaced by the following:

(a) by depositing an instrument in writing executed by the shareholder or by the shareholder’s attorney authorized in writing

50. (1) Subsection 152(2) is replaced by the following:

Marginal note:Right of a proxyholder

(2) A proxyholder or an alternate proxyholder has the same rights as the shareholder by whom they were appointed to speak at a meeting of shareholders in respect of any matter, to vote by way of ballot at the meeting and, except where a proxyholder or an alternate proxyholder has conflicting instructions from more than one shareholder, to vote at such a meeting in respect of any matter by way of any show of hands.

(2) Paragraph 152(3)(a) is replaced by the following:

(a) the chairperson may conduct the vote in respect of that matter or group of matters by a show of hands; and

51. Subsection 159(1) is replaced by the following:

Marginal note:Copies to shareholders

159. (1) A corporation shall, not less than twenty-one days before each annual meeting of shareholders or before the signing of a resolution under paragraph 142(1)(b) in lieu of the annual meeting, send a copy of the documents referred to in section 155 to each shareholder, except to a shareholder who has informed the corporation in writing that he or she does not want a copy of those documents.

52. (1) Subsection 161(1) is replaced by the following:

Marginal note:Qualification of auditor

161. (1) Subject to subsection (5), a person is disqualified from being an auditor of a corporation if the person is not independent of the corporation, any of its affiliates, or the directors or officers of any such corporation or its affiliates.

(2) Subsection 161(3) is replaced by the following:

Marginal note:Duty to resign

(3) An auditor who becomes disqualified under this section shall, subject to subsection (5), resign forthwith after becoming aware of the disqualification.

53. Subsection 164(1) is replaced by the following:

Marginal note:Ceasing to hold office

164. (1) An auditor of a corporation ceases to hold office when the auditor

(a) dies or resigns; or

(b) is removed pursuant to section 165.

54. Subsection 166(4) is replaced by the following:

Marginal note:Unexpired term

(4) An auditor appointed to fill a vacancy holds office for the unexpired term of the auditor’s predecessor.

55. (1) Subsections 168(1) and (2) are replaced by the following:

Marginal note:Right to attend meeting

168. (1) The auditor of a corporation is entitled to receive notice of every meeting of shareholders and, at the expense of the corporation, to attend and be heard on matters relating to the auditor’s duties.

Marginal note:Duty to attend

(2) If a director or shareholder of a corporation, whether or not the shareholder is entitled to vote at the meeting, gives written notice not less than ten days before a meeting of shareholders to the auditor or a former auditor of the corporation, the auditor or former auditor shall attend the meeting at the expense of the corporation and answer questions relating to their duties as auditor.

(2) Subsection 168(5) is replaced by the following:

Marginal note:Statement of auditor

(5) An auditor is entitled to submit to the corporation a written statement giving reasons for resigning or for opposing any proposed action or resolution when the auditor

(a) resigns;

(b) receives a notice or otherwise learns of a meeting of shareholders called for the purpose of removing the auditor from office;

(c) receives a notice or otherwise learns of a meeting of directors or shareholders at which another person is to be appointed to fill the office of auditor, whether because of the resignation or removal of the incumbent auditor or because the auditor’s term of office has expired or is about to expire; or

(d) receives a notice or otherwise learns of a meeting of shareholders at which a resolution referred to in section 163 is to be proposed.

(3) Subsections 168(7) and (8) are replaced by the following:

Marginal note:Replacing auditor

(7) No person shall accept appointment or consent to be appointed as auditor of a corporation to replace an auditor who has resigned, been removed or whose term of office has expired or is about to expire until the person has requested and received from that auditor a written statement of the circumstances and the reasons, in that auditor’s opinion, for their replacement.

Marginal note:Exception

(8) Notwithstanding subsection (7), a person otherwise qualified may accept appointment or consent to be appointed as auditor of a corporation if, within fifteen days after making the request referred to in that subsection, the person does not receive a reply.

56. Subsection 169(1) is replaced by the following:

Marginal note:Examination

169. (1) An auditor of a corporation shall make the examination that is in their opinion necessary to enable them to report in the prescribed manner on the financial statements required by this Act to be placed before the shareholders, except such financial statements or part thereof that relate to the period referred to in subparagraph 155(1)(a)(ii).

57. (1) The portion of subsection 170(1) after paragraph (b) is replaced by the following:

as are, in the opinion of the auditor, necessary to enable the auditor to make the examination and report required under section 169 and that the directors, officers, employees or agents are reasonably able to furnish.

(2) Paragraph 170(2)(a) is replaced by the following:

(a) obtain from the present or former directors, officers, employees and agents of any subsidiary of the corporation the information and explanations that the present or former directors, officers, employees and agents are reasonably able to furnish and that are, in the opinion of the auditor, necessary to enable the auditor to make the examination and report required under section 169; and

58. Subsections 171(6) and (7) are replaced by the following:

Marginal note:Notice of errors

(6) A director or an officer of a corporation shall forthwith notify the audit committee and the auditor of any error or mis-statement of which the director or officer becomes aware in a financial statement that the auditor or a former auditor has reported on.

Marginal note:Error in financial statements

(7) An auditor or former auditor of a corporation who is notified or becomes aware of an error or mis-statement in a financial statement on which they have reported, if in their opinion the error or mis-statement is material, shall inform each director accordingly.

59. Subsection 175(2) is replaced by the following:

Marginal note:Notice of amendment

(2) Notice of a meeting of shareholders at which a proposal to amend the articles is to be considered shall set out the proposed amendment and, where applicable, shall state that a dissenting shareholder is entitled to be paid the fair value of their shares in accordance with section 190, but failure to make that statement does not invalidate an amendment.

60. Paragraph 183(2)(b) is replaced by the following:

(b) state that a dissenting shareholder is entitled to be paid the fair value of their shares in accordance with section 190, but failure to make that statement does not invalidate an amalgamation.

61. Subsection 187(8) is replaced by the following:

Marginal note:Issued shares

(8) Subject to subsection 49(8), a share of a body corporate issued before the body corporate was continued under this Act is deemed to have been issued in compliance with this Act and with the provisions of the articles of continuance irrespective of whether the share is fully paid and irrespective of any designation, rights, privileges, restrictions or conditions set out on or referred to in the certificate representing the share; and continuance under this section does not deprive a holder of any right or privilege that the holder claims under, or relieve the holder of any liability in respect of, an issued share.

62. Subsection 188(3) is replaced by the following:

Marginal note:Notice of meeting

(3) A notice of a meeting of shareholders complying with section 135 shall be sent in accordance with that section to each shareholder and shall state that a dissenting shareholder is entitled to be paid the fair value of their shares in accordance with section 190, but failure to make that statement does not invalidate a discontinuance under this Act.

63. Paragraph 189(4)(b) is replaced by the following:

(b) state that a dissenting shareholder is entitled to be paid the fair value of their shares in accordance with section 190, but failure to make that statement does not invalidate a sale, lease or exchange referred to in subsection (3).

64. (1) Subsections 190(3) to (8) are replaced by the following:

Marginal note:Payment for shares

(3) In addition to any other right the shareholder may have, but subject to subsection (26), a shareholder who complies with this section is entitled, when the action approved by the resolution from which the shareholder dissents or an order made under subsection 192(4) becomes effective, to be paid by the corporation the fair value of the shares in respect of which the shareholder dissents, determined as of the close of business on the day before the resolution was adopted or the order was made.

Marginal note:No partial dissent

(4) A dissenting shareholder may only claim under this section with respect to all the shares of a class held on behalf of any one beneficial owner and registered in the name of the dissenting shareholder.

Marginal note:Objection

(5) A dissenting shareholder shall send to the corporation, at or before any meeting of shareholders at which a resolution referred to in subsection (1) or (2) is to be voted on, a written objection to the resolution, unless the corporation did not give notice to the shareholder of the purpose of the meeting and of their right to dissent.

Marginal note:Notice of resolution

(6) The corporation shall, within ten days after the shareholders adopt the resolution, send to each shareholder who has filed the objection referred to in subsection (5) notice that the resolution has been adopted, but such notice is not required to be sent to any shareholder who voted for the resolution or who has withdrawn their objection.

Marginal note:Demand for payment

(7) A dissenting shareholder shall, within twenty days after receiving a notice under subsection (6) or, if the shareholder does not receive such notice, within twenty days after learning that the resolution has been adopted, send to the corporation a written notice containing

(a) the shareholder’s name and address;

(b) the number and class of shares in respect of which the shareholder dissents; and

(c) a demand for payment of the fair value of such shares.

Marginal note:Share certificate

(8) A dissenting shareholder shall, within thirty days after sending a notice under subsection (7), send the certificates representing the shares in respect of which the shareholder dissents to the corporation or its transfer agent.

(2) Subsection 190(11) is replaced by the following:

Marginal note:Suspension of rights

(11) On sending a notice under subsection (7), a dissenting shareholder ceases to have any rights as a shareholder other than to be paid the fair value of their shares as determined under this section except where

(a) the shareholder withdraws that notice before the corporation makes an offer under subsection (12),

(b) the corporation fails to make an offer in accordance with subsection (12) and the shareholder withdraws the notice, or

(c) the directors revoke a resolution to amend the articles under subsection 173(2) or 174(5), terminate an amalgamation agreement under subsection 183(6) or an application for continuance under subsection 188(6), or abandon a sale, lease or exchange under subsection 189(9),

in which case the shareholder’s rights are reinstated as of the date the notice was sent.

(3) Paragraph 190(12)(a) is replaced by the following:

(a) a written offer to pay for their shares in an amount considered by the directors of the corporation to be the fair value, accompanied by a statement showing how the fair value was determined; or

(4) Paragraph 190(19)(b) is replaced by the following:

(b) the corporation shall notify each affected dissenting shareholder of the date, place and consequences of the application and of their right to appear and be heard in person or by counsel.

(5) Paragraph 190(25)(a) is replaced by the following:

(a) withdraw their notice of dissent, in which case the corporation is deemed to consent to the withdrawal and the shareholder is reinstated to their full rights as a shareholder; or

65. (1) Subparagraphs 206(3)(c)(i) and (ii) are replaced by the following:

(i) to transfer their shares to the offeror on the terms on which the offeror acquired the shares of the offerees who accepted the take-over bid, or

(ii) to demand payment of the fair value of the shares in accordance with subsections (9) to (18) by notifying the offeror within twenty days after receiving the offeror’s notice;

(2) Paragraph 206(3)(e) is replaced by the following:

(e) a dissenting offeree must send their shares to which the take-over bid relates to the offeree corporation within twenty days after receiving the offeror’s notice.

(3) Subsection 206(11) is replaced by the following:

Marginal note:Status of dissenter if no court application

(11) Where no application is made to a court under subsection (10) within the period set out in that subsection, a dissenting offeree is deemed to have elected to transfer their shares to the offeror on the same terms that the offeror acquired the shares from the offerees who accepted the take-over bid.

(4) Paragraph 206(14)(b) is replaced by the following:

(b) the offeror shall notify each affected dissenting offeree of the date, place and consequences of the application and of their right to appear and be heard in person or by counsel.

(5) Subsection 206(17) is replaced by the following:

Marginal note:Final order

(17) The final order of the court shall be made against the offeror in favour of each dissenting offeree and for the amount for the shares as fixed by the court.

(6) Paragraph 206(18)(c) is replaced by the following:

(c) allow a reasonable rate of interest on the amount payable to each dissenting offeree from the date they send or deliver their share certificates under subsection (5) until the date of payment; and

66. The portion of subsection 212(2) before paragraph (b) is replaced by the following:

Marginal note:Publication

(2) The Director shall not dissolve a corporation under this section until the Director has

(a) given one hundred and twenty days notice of the decision to dissolve the corporation to the corporation and to each director thereof; and

67. Paragraph 217(o) is replaced by the following:

(o) after the liquidator has rendered a final account to the court, an order dissolving the corporation.

68. Subsection 219(2) is replaced by the following:

Marginal note:Delegation by liquidator

(2) The liquidator may delegate any powers vested in the liquidator by paragraph (1)(b) to the directors or shareholders.

69. (1) Paragraph 221(a) is replaced by the following:

(a) forthwith after appointment give notice thereof to the Director and to each claimant and creditor known to the liquidator;

(2) Paragraph 221(c) is replaced by the following:

(c) take into custody and control the property of the corporation;

(3) Paragraphs 221(h) and (i) are replaced by the following:

(h) deliver to the court and to the Director, at least once in every twelve month period after appointment or more often as the court may require, financial statements of the corporation in the form required by section 155 or in such other form as the liquidator may think proper or as the court may require; and

(i) after the final accounts are approved by the court, distribute any remaining property of the corporation among the shareholders according to their respective rights.

70. Subsection 222(3) is replaced by the following:

Marginal note:Application for examination

(3) If a liquidator has reason to believe that any person has in their possession or under their control, or has concealed, withheld or misappropriated any property of the corporation, the liquidator may apply to the court for an order requiring that person to appear before the court at the time and place designated in the order and to be examined.

71. The portion of subsection 223(2) before paragraph (b) is replaced by the following:

Marginal note:Final accounts

(2) Within one year after appointment, and after paying or making adequate provision for all claims against the corporation, the liquidator shall apply to the court

(a) for approval of the final accounts and for an order permitting the liquidator to distribute in money or in kind the remaining property of the corporation to its shareholders according to their respective rights; or

72. The portion of subsection 226(5) before paragraph (b) is replaced by the following:

Marginal note:Representative action

(5) A court may order an action referred to in subsection (4) to be brought against the persons who were shareholders as a class, subject to such conditions as the court thinks fit and, if the plaintiff establishes a claim, the court may refer the proceedings to a referee or other officer of the court who may

(a) add as a party to the proceedings each person who was a shareholder found by the plaintiff;

73. Subsection 227(3) is replaced by the following:

Marginal note:Recovery

(3) A person who establishes an entitlement to any moneys paid to the Receiver General under this Act shall be paid by the Receiver General an equivalent amount out of the Consolidated Revenue Fund.

74. Subsection 229(3) is replaced by the following:

Marginal note:Notice to Director

(3) A security holder who makes an application under subsection (1) shall give the Director reasonable notice thereof and the Director is entitled to appear and be heard in person or by counsel.

75. (1) The portion of subsection 235(1) before paragraph (a) is replaced by the following:

Marginal note:Information respecting ownership and control

235. (1) If the Director is satisfied that, for the purposes of Part XI, XIII or XVII, or for the purposes of enforcing any regulation made under section 174, there is reason to inquire into the ownership or control of a security of a corporation or any of its affiliates, the Director may require any person that the Director reasonably believes has or has had an interest in the security or acts or has acted on behalf of a person with such an interest to report to him or her or to any person the Director designates

(2) Subsection 235(2) is replaced by the following:

Marginal note:Constructive interest in securities

(2) For the purposes of subsection (1), a person is deemed to have an interest in a security if

(a) the person has a right to vote or to acquire or dispose of the security or any interest therein;

(b) the person’s consent is necessary for the exercise of the rights or privileges of any other person interested in the security; or

(c) any other person interested in the security can be required or is accustomed to exercise rights or privileges attached to the security in accordance with the person’s instructions.

76. Section 236 is replaced by the following:

Marginal note:Solicitor-client privilege

236. Nothing in this Part shall be construed as affecting solicitor-client privilege.

77. Paragraph 241(3)(g) is replaced by the following:

(g) an order directing a corporation, subject to subsection (6), or any other person, to pay a security holder any part of the monies that the security holder paid for securities;

78. Paragraph 243(3)(c) is replaced by the following:

(c) an order determining the right of a party to the proceedings to have their name entered or retained in, or deleted or omitted from, the registers or records of the corporation, whether the issue arises between two or more security holders or alleged security holders, or between the corporation and any security holders or alleged security holders; and

79. Section 244 is replaced by the following:

Marginal note:Application for directions

244. The Director may apply to a court for directions in respect of any matter concerning the Director’s duties under this Act, and on such application the court may give such directions and make such further order as it thinks fit.

80. Section 245 is replaced by the following:

Marginal note:Notice of refusal by Director

245. (1) If the Director refuses to file any articles or other document that this Act requires the Director to file before the articles or other document become effective, the Director shall, within twenty days after receiving them or twenty days after receiving any approval that may be required under any other Act, whichever is later, give written notice of the refusal to the person who sent the articles or document, giving reasons.

Marginal note:Deemed refusal

(2) If the Director does not file or give written notice of the refusal to file any articles or document within the time limited therefor in subsection (1), the Director is deemed for the purposes of section 246 to have refused to file the articles or document.

81. Section 247 is replaced by the following:

Marginal note:Restraining or compliance order

247. If a corporation or any director, officer, employee, agent, auditor, trustee, receiver, receiver-manager or liquidator of a corporation does not comply with this Act, the regulations, articles, by-laws, or a unanimous shareholder agreement, a complainant or a creditor of the corporation may, in addition to any other right they have, apply to a court for an order directing any such person to comply with, or restraining any such person from acting in breach of, any provisions thereof, and on such application the court may so order and make any further order it thinks fit.

82. Subsection 250(3) is replaced by the following:

Marginal note:Immunity

(3) No person is guilty of an offence under subsection (1) or (2) if the person did not know, and in the exercise of reasonable diligence could not have known, of the untrue statement or omission.

83. Subsection 252(1) is replaced by the following:

Marginal note:Order to comply

252. (1) Where a person is guilty of an offence under this Act or the regulations, any court in which proceedings in respect of the offence are taken may, in addition to any punishment it may impose, order that person to comply with the provisions of this Act or the regulations for the contravention of which the person has been convicted.

84. (1) Paragraphs 253(1)(a) and (b) are replaced by the following:

(a) the shareholder at the shareholder’s latest address as shown in the records of the corporation or its transfer agent; and

(b) the director at the director’s latest address as shown in the records of the corporation or in the last notice filed under section 106 or 113.

(2) Subsection 253(3) is replaced by the following:

Marginal note:Deemed receipt

(3) A notice or document sent in accordance with subsection (1) to a shareholder or director of a corporation is deemed to be received at the time it would be delivered in the ordinary course of mail unless there are reasonable grounds for believing that the shareholder or director did not receive the notice or document at that time or at all.

85. Subsection 259(1) is replaced by the following:

Marginal note:Proof required by Director

259. (1) The Director may require that a document or a fact stated in a document required by this Act or the regulations to be sent to the Director shall be verified in accordance with subsection (2).

86. Subsection 262(3) is replaced by the following:

Marginal note:Date of certificate

(3) A certificate referred to in subsection (2) issued by the Director may be dated as of the day the Director receives the articles, statement or court order pursuant to which the certificate is issued or as of any later day specified by the court or person who signed the articles or statement.

87. Section 264 is replaced by the following:

Marginal note:Alteration

264. The Director may alter a notice or document, other than an affidavit or statutory declaration, if authorized by the person who sent the document or by that person’s representative.

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